Lebanon has tripled the rate at which it will calculate customs taxes, fees and duties for all imported goods just months after the caretaker government already raised the rate for the first time in decades.
Customs taxes will be calculated at 45,000 Lebanese pounds to the dollar, up from 15,000 pounds to the dollar.
In a cabinet resolution earlier this week, seen by The National, the government justified the effective tripling as “securing additional revenues that contribute to the revival of work in the public sector”.
Lebanon, which is suffering from one of the worst economic crises in modern history, is also dealing with a currency collapse accompanied by a severe liquidity crisis.
The customs taxes were raised to 15,000 pounds to the dollar only three months ago — coinciding with a central bank decision that increased Lebanon’s long-affixed official exchange rate, pegged at 1,500 pounds to the dollar for decades before the economy collapsed and took the currency down with it.
It remains to be seen how the Lebanese public will take the decision, which will exponentially raise the cost of most goods.
Life is already unaffordable for many, with more than two thirds of the population impoverished, according to the UN.
Now, consumers will have to manage the additional worry of retailers raising prices to offset higher import costs.
Lebanon is heavily reliant on imports while exporting little, widening a severe trade deficit.
“Our country imports everything,” Economy Minister Amin Salam told the press on Tuesday, after pronouncing the collapse of the nation’s financial system.
“There’s no other country in the world that imports more than 90 per cent of its goods. Even our domestic products are made using primary components that are imported. And everything is priced on the dollar.”
But the vast majority of the population is paid in the local currency, which plummets in value almost daily.
Already, December's decision to raise the customs taxes to 15,000 pounds to the greenback has been criticised by the public.
Many questioned the move, arguing that it would render goods and services unaffordable.