What's happened
Lebanese cabinet approved increased wages, VAT, and fuel taxes to fund public sector raises, sparking protests and road blockades. The measures aim to address economic crisis and fund salaries, but face opposition from unions and transport sectors. The move comes ahead of IMF talks.
What's behind the headline?
The Lebanese government’s decision to raise taxes and wages is a calculated move to address the ongoing economic crisis, but it risks further inflation and social unrest. The increase in VAT and fuel taxes, while necessary for fiscal balance, disproportionately burdens ordinary citizens and transport workers, fueling protests reminiscent of the 2019 uprising. The government’s reliance on tax hikes to fund salary increases highlights the limited fiscal space and the deep-rooted structural issues. The protests and road blockades demonstrate the public’s frustration and the potential for escalation, especially with upcoming IMF negotiations. The disarmament plan for Hezbollah adds a layer of regional tension, complicating Lebanon’s political landscape. Overall, these measures are likely to deepen economic hardship in the short term, but may be necessary for long-term stabilization if accompanied by credible reforms and international support.
What the papers say
The articles from Arab News, The New Arab, and The Independent collectively highlight Lebanon’s complex economic and political crisis. Arab News emphasizes the government’s fiscal measures and internal disagreements, quoting officials like Finance Minister Yassin Jaber and Energy Minister Joe Saddi. The New Arab details the protests and road blockades, noting the opposition from unions and the public, and contextualizes the measures within IMF negotiations. The Independent focuses on the social impact, including protests by taxi drivers and the historical memory of 2019 protests over internet taxes. Contrasting opinions include the government’s justification for tax hikes versus union leaders’ opposition, illustrating the deep divide and the fragile state of Lebanon’s stability.
How we got here
Lebanon has been suffering from a severe economic crisis since 2019, marked by currency depreciation, inflation, and widespread corruption. The country’s financial instability worsened after the 2024 Israel-Hezbollah war damages and ongoing border tensions. The government’s recent decision to raise taxes and wages is part of efforts to stabilize finances and meet international reform expectations, but faces resistance from unions and the public.
Go deeper
Common question
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Why Did Lebanon Raise Taxes Despite Public Outcry?
Lebanon's recent decision to increase taxes has sparked widespread protests and debate. Many wonder why the government chose to implement these measures amid economic turmoil and public resistance. In this page, we explore the reasons behind the tax hikes, the reactions from citizens and unions, and what this means for Lebanon's future. If you're curious about Lebanon's economic crisis and government policies, keep reading to find clear answers to your questions.
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