Panel Discussion on: "Towards a Just and Effective Tax System"

On December 16, 2025, our Institute and the Department of Economics at the American University of Beirut, and as part of the "Lebanon: Towards a Productive Economy" Seminar Series, held a panel discussion on: "Towards a Just and Effective Tax System," with Ishac Diwan, Karim Daher, Mona Fawaz and Ali Abboud, moderated by Saade Chami.

About the Discussion:
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Lebanon has traditionally maintained a low taxation rate, despite high public expectations regarding the role of the state. This began to change in 2001 with the introduction of VAT, which has since become the state’s single largest source of revenue. Over the two decades that followed, various reforms were proposed and implemented, culminating in the widely denounced “WhatsApp tax” of October 2019 that helped ignite the subsequent waves of protest.

Since the triple-crisis of 2019, government revenue and expenditure have collapsed by a factor of four, before starting a slow recovery. The 2025 budget proposes to return tax revenues to about the same ratio of GDP as in 2018, although tax revenues remain at a much lower absolute level. With an exceptionally large informal sector and recurring revelations of past tax evasion schemes, key questions arise: How can the state increase its revenues in a just and effective way? Where are the untapped bases that could be taxed in a socially fair manner? Conversely, which taxes disproportionately burden the poorest and should be reconsidered or removed? How could taxation be used to nudge behavior in ways that enhance welfare in Lebanon?