The Constitutional Council has unanimously revoked a new tax law, in its entirety, which was recently passed by Parliament. The law will be returned to Parliament for debate.
The Council said that the Parliamentary voting process for the tax law was not nominal and therefore it was not constitutional. It also said that the law was not approved in the framework of the preparation of the public budget. Another violation of the law, according to the Council, is that specific revenues were earmarked for specific expenditures. The infringements include double taxation for self-employed professionals and inequality among similar taxpayers.
Member of Parliament (MP) Boutros Harb said that he and the other parliamentarians who had challenged the new law will meet to propose an alternative.
"We did not reject all the taxes included in the law, but only those that are detrimental to citizens, especially low-income people," Harb said. He said that they will propose to keep some of the taxes, including those that will be imposed on banks.
The revoked law was suspended by the Constitutional Council earlier this month, after its constitutionality was challenged by a number of lawmakers, who had filed an appeal with the Council.
The challenging MPs had said that they were concerned that the additional taxes would weaken peoples' purchasing power and would have inflationary repercussions.
The Government needs to raise revenues to finance the public sector pay rise as the fiscal deficit reached $5 billion in 2016 while public debt stood at around $74 billion or 144 percent of GDP.
Mohammed Choucair, Chairman of the Federation of the Chambers of Commerce, Industry and Agriculture said: "The decision of the Constitutional Council today to abolish the new tax law to finance the scale of wages and salaries is wise, and a historic step that has saved the country from an economic predicament."
"We hope this decision will create a positive shock to the politicians, and pushes authorities to re-examine," he said.