Has the ‘shater’* Lebanese finally run out of tricks?

According to a study carried out by Information International for the Lebanese Broadcasting Company (LBC), the average Lebanese are now over burdened by taxes, particularly by indirect levies and tariffs. Estimates of the ratio of taxes to income bracket ranged from 100% for those with an income between $200–$500 per month, to 58% for those between $1,000–$5,000, 51% for those earning $1,500–$2,000, 41% for those that fell in the $2,001–$3,000 bracket and 30% for those with an income above $3,000.

Furthermore, only 24.4% of households benefit from the Ministry of Health plan. The poll found that 90.5% of Lebanese believe that taxes are “exorbitant” while only 7.5% consider them acceptable and 0.5% describe them as “low”. The mind-boggling question is not why indirect taxes are much higher than direct taxes, since this is a slick way of getting the money without being accountable. Nor is it the fact that the higher income brackets pay less than the lower ones, since the ruling class is doing what is beneficial for itself. The real question is: How are the Lebanese “making it”? If they are!

Assuming that approximately 34% of Lebanese household income falls between $200–$500 (according to the 1996 survey by the Central Administration for Statistics), or 25.3% (according to more recent surveys by Information International), approximately one third or one quarter of households pay practically 100% of their income in taxes. Perhaps many people work overtime or juggle two jobs. But in order to really answer the above question, one has to look deep into the making of Lebanon, a country of human export, egocentricity and illicit alliances between politicians and citizens.

We export our human resources, receive portions of their returns, live above our means (one million cars and one million cellular phones) and illicitly agree with our politicians to elect them and not hold them accountable, provided they let us get away with not paying electricity bills (just one example), receiving salaries without working (overstaffing of public administrations) and doing all the other things that the ‘shater’ Lebanese is capable of doing. What the ‘shater’ politician and ‘shater’ citizen has not yet grasped is that the magician is running out of tricks and that the game cannot go on indefinitely.

* Shater in Arabic means clever.

Jawad Adra
Managing Partner

  Current Statistics

Public schools

• LL 236.6 billion ($157 million) in government funds for public school projects is to be distributed by the CDR in 2003.

Presidential expenditures

• LL 4.9 billion ($3.2 million) in additional expenditures by the Office of the President were incurred as of July 2003. This is 147% above the figure estimated in the budget (LL 3.35 billion).

Higher Relief Committee

• LL38.9 billion ($25.8 million) in government compensation was allocated to the Higher Relief Committee for those affected by winter storms in February 2003.

Central Inspection Board

• LL 223.5 billion ($148.3 million) in bids for government projects were tendered by the Central Inspection Board’s Bids Department in 2002. This was an increase of LL 126 billion ($83.6 million) from the previous year. Despite the rise, contracts up for tender by the Bids Department make up only 20% of all government contracts.