New taxes suspended by Constitutional Council. Pay rise law is still in force

The Ministry of Finance (MoF) has instructed all units under its authority to halt the collection of additional taxes and fees that are subject to a new law that has been suspended by the Constitutional Council.

The law, that aimed to finance a pay rise for employees of the armed forces and public sector, was approved by Parliament in July along with a law that restructured public sector wage and salary scales. President Michel Aoun signed the two laws in August.

The Constitutional Council decided to suspend the enactment of the new tax law after its constitutionality was challenged by a number of Members of Parliament, who had filed an appeal with the Council.

The lawmakers said the tax hike would weaken the purchasing power of citizens and would have inflationary repercussions. They said the government could find other ways to finance the pay rise, such as fighting corruption and reducing wastage when spending public funds.

In a statement, Issam Sleiman, Chairman of the Constitutional Council, denied that the council had also suspended the new wage and salary scale.

The new tax law involves increasing a number of taxes, including Value Added Tax (VAT), which was raised to 11 percent from ten percent.