The hike will boost VAT revenues ten percent. Calculated on 2016 VAT figures, this will add $215 million to the Treasury. It will increase prices to consumers by around one percent.
Fiscal stamp fees were increased from three per thousand to four per thousand, with the potential to get more than $100 million into State coffers.
The increases have been approved within the 2017 budget, but it is still unclear when the actual implementation will begin.
“We don’t object to raising taxes provided the government fights smuggling and tax evasion, resulting in uncollected tax revenues of nearly $1.5 billion ,” said Mohammad Choucair, Chairman of the Federation of Chambers of Commerce, Industry and Agriculture.
“Some businesses make false declarations claiming that their turnover is less than $100,000 in order to avoid paying VAT,” he said.
“The government should collect the tax all over the country with no exception,” Choucair said.