Lebanon Businessnews News

Lebanon tops Arab
world in financial secrecy
It mixes secrecy with big tax exemptions
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The Tax Justice Network (TJN) said it has ranked Lebanon first in the Arab world and seventh globally in the 2015 Financial Secrecy Index (FSI).

“Lebanon has sailed against the prevailing winds on global financial transparency and continues to make secrecy a core selling point,” according to TJN, which describes itself as “a coalition of researchers and activists focused on the harmful impacts of tax avoidance, tax competition and tax havens.”

Lebanon has a very high secrecy score, which remained basically unchanged since 2013. It mixes financial secrecy with substantial tax exemptions for nonresidents and this makes it a ‘classic’ tax haven, TJN said in the FSI report. The non-resident category consists of the large diaspora that includes high net-worth individuals in addition to depositors from other Arab countries.

With bank assets representing 400 percent of its GDP, Lebanon is more dominated by its banking sector than most other financial hubs. Its offshore financial services sector remained resilient despite the political and security problems. This sector has been growing at an annual average of 12 percent since 2006, with bank deposits reaching nearly $175 billion at the end of 2014.

“Lebanon’s strong focus on financial secrecy has naturally made the country a hotbed of illicit activity,” the TJN report said. It said that Lebanon has merely taken partial measures to abide by international transparency standards.
Reported by Shikrallah Nakhoul
Date Posted: Nov 17, 2015
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