The Lebanese government, after a cabinet meeting in Beirut, has decided to raise the Value Added Tax (VAT) and the price of gasoline while also approving salary increases for public sector employees and retirees. Information Minister Paul Marquois stated that the cabinet has granted six additional salaries based on values set in 2019, amounting to between $100 and $120 per month for around 251,000 employees and retirees. This increase will be disbursed as separate compensation and not integrated into the base salary.

The estimated annual cost of these salary increases is around $800 million, with payments commencing after the VAT hike legislation is passed, although no clear implementation date was provided. Concurrently, the government has raised the VAT by one percentage point to 12%, increased gasoline prices by approximately 300,000 Lebanese pounds (around $3.5), and raised fees on shipping containers while abolishing previous duties on diesel fuel. The cabinet emphasized the need to improve revenue collection and enhance monitoring at border crossings to boost public revenues.

This development is occurring against the backdrop of an ongoing economic crisis in Lebanon, which has severely impacted the living conditions of ordinary citizens. The dual measures of increasing taxes and salaries, particularly amid union discontent, suggest growing tensions between the government and public sector employees, with potential ramifications for social stability and economic recovery efforts in the country.