Work taking place on a government palace building in Beirut, as Lebanon's Prime Minister designate Nawaf Salam works to form a cabinet. EPA
Work taking place on a government palace building in Beirut, as Lebanon's Prime Minister designate Nawaf Salam works to form a cabinet. EPA
Work taking place on a government palace building in Beirut, as Lebanon's Prime Minister designate Nawaf Salam works to form a cabinet. EPA
Work taking place on a government palace building in Beirut, as Lebanon's Prime Minister designate Nawaf Salam works to form a cabinet. EPA

Finance Ministry at the heart of Lebanon’s convoluted cabinet consultations


Jamie Prentis
  • English
  • Arabic

More than two weeks after Nawaf Salam was designated as Lebanon's next Prime Minister, the extensive and complicated consultations that lead to the creation of the country's cabinet continue.

It's the highly coveted Finance Ministry – whose head in recent years has been named by parliamentary speaker Nabih Berri – that is proving most controversial.

Historically, the ministry has been held by ministers aligned with Hezbollah and the Amal Movement. Allocating the ministry to them again would likely spark controversy, as Lebanon aspires to usher in a new era under a president and prime minister seen as independent from the entrenched ruling elite widely blamed for the country’s many crises.

Mr Salam is seen as a newcomer and a break from the traditional political system. The work of Change MPs – lawmakers who emerged after the October 2019 protests against Lebanon's ruling elite – was instrumental in his appointment.

On Wednesday night, after meeting with President Joseph Aoun, Mr Salam reiterated his government would not be comprised of MPs or figures from political parties. He insisted that no decision had been made, adding “no ministry is exclusive to a certain sect and no ministry is prohibited to a certain sect”.

But a key obstacle remains the Finance Ministry.

Mr Berri, leader of the Amal Movement, insists the Finance Ministry has been historically reserved for the Shiite community – whose parliamentary representation comes from Hezbollah and Amal. He said this week that his party's choice is Yassine Jaber, a former minister of economy and financial expert.

A senior parliamentary figure close to both parties said that Mr Jaber is not a member of Amal. He pointed out that he is also not an MP, which would not affect his chances of becoming a minister, under Mr Salam's conditions.

However, such a move by Mr Berri and his allies has been met with short shrift by opponents, riding on a wave of optimism.

“Let me be frank. It is not normal to not apply the same rules to everyone. When you do a shuffling of the ministers, you have to have no exceptions,” said Samy Gemayel, leader of the Kataeb, one of Lebanon's oldest political parties.

“Any privilege given to anyone is a door for discrimination and a door for people to feel that they are not equals,” he told The National. “So, based on that, we are clear that we should not give the financial keys of the government to Amal and Hezbollah.”

Imposing conditions

The election of Mr Aoun on January 9, following a two-year presidential vacuum, was influenced by pressure from the US, France and Saudi Arabia. Lebanon urgently requires financial support to tackle an economic crisis that began in 2019, further exacerbated by the destruction caused by a war between Hezbollah's military wing and Israel, which inflicted billions of dollars in damage.

A ceasefire deal to end the conflict, reached in November last year, needs strong leadership to ensure it holds.

On Wednesday, caretaker Economy Minister Amin Salam said Lebanon must regain the trust of the international community to unlock financial aid for reconstruction after the war between Hezbollah and Israel.

Opponents of Hezbollah and Amal are resisting attempts by the parties to impose candidates on any ministry − not just the finance portfolio − accusing them of having a stranglehold over a government that has persisted longer than a decade. Some 84 out of Parliament's 128 MPs voted for Mr Salam; Hezbollah and Amal abstained after seeing that their choice, incumbent Prime Minister Najib Mikati, would not win.

“Since the beginning, there was a group of people who voted for Nawaf Salam against the will of another group. Hezbollah didn't vote for Nawaf Salam, nor [did] Mr Berri. And the others did,” said a senior political source from the faction who voted for Mr Salam.

“We were in agreement that no party will impose on Mr Salam any portfolio or any case or any condition.”

“It's not acceptable that the people who chose Mr Salam to lead a government of reform and sovereignty will end up losing in front of people imposing conditions who don't support his agenda,” added the source.

The source insisted it was not “about the Finance Ministry, it's about a certain party imposing its conditions on the Prime Minister and the President of the Republic against the discipline of the other parties”.

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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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Updated: January 30, 2025, 2:14 PM