Lebanon's Sunni community is without strong leadership for the first time in decades after former prime minister Saad Hariri stepped back from politics this year. AFP
Lebanon's Sunni community is without strong leadership for the first time in decades after former prime minister Saad Hariri stepped back from politics this year. AFP
Lebanon's Sunni community is without strong leadership for the first time in decades after former prime minister Saad Hariri stepped back from politics this year. AFP
Lebanon's Sunni community is without strong leadership for the first time in decades after former prime minister Saad Hariri stepped back from politics this year. AFP

Lebanon's Sunni leadership void could derail naming of prime minister


Nada Homsi
  • English
  • Arabic

With parliamentary elections over, Lebanon must designate a prime minister to form a new government, but analysts say political divisions could get in the way.

President Michel Aoun is expected to call for consultations in the coming days, when representatives from the blocs in Parliament will put forward their candidates.

Choosing the right prime minister could be vital to reforms designed to pull Lebanon out of one of the worst economic crises in its history.

Under the state's confessional political convention, the president must be a Maronite Christian, the speaker a Shiite and the prime minister a Sunni.

Analysts said political divisions across a polarised new Parliament and a void in Sunni leadership could threaten the process.

Saad Hariri, leader of the Future Movemen, the biggest Sunni party in Lebanon, announced his withdrawal from political life on January 22 and declined to run in May’s parliamentary elections, instructing his party to boycott them.

Hariri's departure created a vacuum in the Sunni political sphere, analysts said, leaving opportunity for new leadership.

Sami Nader, director of the Levant Institute for Strategic Affairs, has observed that no one leader represents Sunnis, while voices in the community have become more diverse.

“The new Sunni leadership, those who won the election, have one thread in common, which is that they are refusing the domination of Hezbollah and the influence of Iran,” Mr Nader said.

Former Lebanese Prime Minister Saad Hariri announced his withdrawal from politics in January. Reuters
Former Lebanese Prime Minister Saad Hariri announced his withdrawal from politics in January. Reuters

Lebanon’s Parliament is split. Unlike the previous assembly, in which the pro-Hezbollah bloc had an absolute majority, no bloc has a clear majority this time.

The hung parliament has led analysts to predict a prolonged deadlock in the upcoming government formation process.

Joseph Bahout, the director of the Issam Fares Institute for Public Policy and International Affairs in Beirut, said that one of the major considerations in designating a prime minister would be whether they would be able to balance regional ­interests.

It is not yet clear what the regional backers of the Sunni community will do, he said.

While the influence of Iran-backed Hezbollah has grown in Lebanon, including in formal government institutions, the country’s relations with Gulf states have deteriorated.

A diplomatic row with the Gulf began in October 2021 when a Lebanese minister made comments about the Saudi-led coalition’s intervention in Yemen.

The incident led Saudi Arabia to expel the Lebanese ambassador and recall its envoy from Beirut. The UAE, Bahrain and Kuwait followed suit.

Riyadh also ordered an immediate ban of all Lebanese imports and barred its citizens from travelling to the country.

Although Saudi Arabia rein­stated its ambassador in Leb­anon in April, Mr Bahout said it was unclear the extent of the influence the kingdom would have in the country at this stage.

Any contender for prime minister, Mr Bahout said, would need be accepted by the pro-Hezbollah bloc and the Sunni bloc.

Why is Lebanon experiencing a vacuum in Sunni leadership?

Lebanon’s Sunni power vacuum has its origins in October 2019, when the first signs of the country’s financial trouble began to show.

It led to a mass uprising that forced prime minister Mr Hariri’s government to resign.

Since then, Lebanon has slid deeper into instability. An economic collapse marked by shortages of fuel, electricity and medicine took hold as the value of the Lebanese pound plummeted and about 80 per cent of the population was driven into poverty.

In August 2020, an explosion of thousands of tonnes of ammonium nitrate stored for years at Beirut Port destroyed large parts of the capital and killed more than 215 people.

Prime minister Hassan Diab resigned, and although there were attempts to form successive governments by Mr Hariri and relative newcomer Mustapha Adib, Mr Diab’s government remained in a caretaker capacity for 13 months owing to prolonged deadlocks.

In July 2021, Najib Mikati was appointed prime minister. His government has remained in a caretaker role since last month's parliamentary elections.

Lebanese President Michel Aoun, centre background, and Lebanese Prime Minister Najib Mikati, left background. AP
Lebanese President Michel Aoun, centre background, and Lebanese Prime Minister Najib Mikati, left background. AP

Given the void in Sunni leadership in Lebanon and the difficulties involved in designating a prime minister who is acceptable to a majority, Mr Bahout predicts Mr Mikati will be chosen to lead the government once again.

Mr Mikati last month said he was reluctant to take on the job, telling media in Lebanon that the task would be “difficult … because most of the political discourse revolves around who has a stronger backing than who”.

He said he would support any candidate designated for the job and suggested MPs Ashraf Rifi and Abdul Rahman Bizri could take the post, as well as the former IMF economist Amer Bisat.

'Hard time' finding global acceptance

Mr Bahout said anyone chosen as prime minister needed popular legitimacy and a diplomatic finesse to rally parliamentary blocs and regional powers.

But although figures such as Mr Rifi will try to “maximise their space in the Sunni arena” now that Mr Hariri is out of it, Mr Bahout said, his designation for the post is unlikely given his outspoken opposition to Hezbollah.

Despite this, Mr Bahout said, former members of Mr Hariri's Future Movement such as Mr Rifi will be worth watching because they are well-suited to seeking support from Saudi Arabia.

But Mr Nader said the formation of a government by any figure close to Hezbollah and its allies would have a hard time with the reforms necessary to take Lebanon towards an economy revival or strike a deal for an IMF bailout.

“They would have a hard time finding acceptance in the international community,” he said.

Whomever Mr Aoun chooses, analysts are not upbeat about the political future.

Mr Nader said that “this does not bode well for the comeback of proper functioning of ­institutions”.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Uefa Champions League semi-final, first leg

Barcelona v Liverpool, Wednesday, 11pm (UAE).

Second leg

Liverpool v Barcelona, Tuesday, May 7, 11pm

Games on BeIN Sports

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Updated: June 13, 2022, 6:23 PM