A top Lebanese banker warned on Thursday that a proposed hike in the tax on interest income would affect capital flows to Lebanon, weaken banks’ ability to play their financing role in the economy, and obstruct growth. The Lebanese government is currently discussing a draft 2019 budget that would raise the tax paid on deposit interest income to 10 percent from 7 percent. Interest income had been tax free until the levy was introduced last year. Lebanon is saddled with one of the heaviest public debt burdens in the world and Prime Minister Saad al-Hariri’s government has vowed to enact long-delayed reforms to put state finances on a sustainable path. Joseph Torbey, chairman of the Association of Banks in Lebanon warned against underestimating the impact of “subjecting the banking system and its deposits to seasonal taxes at every opportunity – as happened last year” – a reference to the new levy in 2018.
Lebanon is calling on Iran to use the upcoming holy month of Ramadan to grant amnesty to a Lebanese citizen who is also a U.S. resident imprisoned there for more than three years. The appeal for the release of Nizar Zakka came Friday in a letter sent by Lebanon’s Foreign Minister to his Iranian counterpart. The letter was delivered to the Iranian ambassador to Lebanon.