IMF reviews Lebanon's economic plan: Finance Minister vows no more off-budget spending

Report by Lara El Hachem, English adaptation by Yasmine Jaroudi  

The International Monetary Fund (IMF) presented its fiscal vision for Lebanon during a technical meeting with Lebanese officials, focusing on key reforms, including bank restructuring, public debt management, revenue generation, customs modernization, and sector-specific growth over the next three to five years.

The meeting, led by IMF mission chief Ernesto Rigo, was preceded by bilateral discussions with Finance Minister Yassine Jaber. 

Following the talks, Jaber reaffirmed Lebanon's commitment to enforcing laws related to revenue collection, tax and customs evasion, and spending discipline and pledged to achieve a primary fiscal surplus. He also emphasized that the government will no longer finance any sector outside the approved state budget, including the power sector. 

One key topic was the recent move to increase taxes on fuel to fund salary hikes for military personnel. The IMF welcomed the measure as an example of responsible budgeting, emphasizing the need for any new spending to be offset by new revenue and implemented strictly within the framework of the state budget. 

The IMF also called for a comprehensive financial audit of all state-owned entities, including Électricité du Liban (EDL), the Casino du Liban, the port authority, Ogero, and the regional water establishments.

LBCI has learned that the Finance Ministry's reform efforts are currently centered on ensuring that all taxpayers are registered with the tax administration and are held accountable for dues. In a step toward this goal, the minister sent a letter to the Interior Ministry urging municipalities to share information on businesses subject to income tax.

The ministry is also preparing to implement an e-invoicing system to combat customs evasion, which has often occurred through the use of falsified paper invoices. Combined with efforts to tighten control over both legal and illegal border crossings, the reforms, if effectively executed, are expected to generate up to 30% of Lebanon's total tax revenues.

The IMF delegation is expected to return by the end of summer to assess Lebanon's progress and conduct a full review of the reform implementation.