VAT increases to 12 percent
to offset increase in public pay

Fees increased on gasoline and containers

The Council of Ministers has approved the payment of six additional monthly salaries to public sector employees and retirees. These payments, which will not be incorporated into the base salary, will range between $120 and $200 per month depending on rank.

For the first time in eight years, the government will also submit a draft law to Parliament to raise the Value-Added Tax (VAT) from 11 percent to 12 percent. In parallel, it will issue decrees with immediate effect increasing the price of a gasoline can by LL300,000, equivalent to about $3.35, and adjusting container fees to $50 for a 20-foot container and $80 for a 40-foot container.

The government has pledged that any salary increases or new hiring requiring additional spending will be matched by measures to secure additional revenue. The decision will affect around 251,000 employees and retirees, as well as the recruitment of 1,690 teaching staff at the Lebanese University.

According to the 2026 budget estimates, the additional one percentage point on VAT is expected to generate approximately $207.7 million annually, revenue that can be collected immediately.

The government said the total cost of the salary measures to the public treasury would reach about $800 million, which it argues makes new taxes and fees unavoidable.

University professors are demanding a 37-fold increase in their salaries. Administrative staff, along with retired military and civilian personnel, were told during the 2026 budget discussions that their salaries would be restored to 50 percent of their 2019 levels. The remaining gap would be paid in 10 percent increments every six months, with the aim of compensating for losses caused by the monetary and banking collapse by 2028.