Finance Minister Jaber defends gasoline tax and VAT hike

Finance Minister Yassine Jaber on Tuesday held a press conference to defend the controversial taxes that were imposed by the government overnight.

"We have reached a critical juncture with a paralyzed and struggling public sector. A decision was necessary. Negotiations took place with the military, and a meeting was held at the Ministry of Defense. The consensus was to approve the salary increase, and those present understood that approving it without revenues would expose the country to a crisis, Jaber said.

Roads were blocked across the country on Tuesday in protest at the new taxes. They were eventually reopened by the army.

Jaber pointed out that "granting the increase without revenues would expose the country to a crisis, and this was the recommendation of the International Monetary Fund,” adding that the government is “very keen on maintaining fiscal balance."

He explained that "the treasury cannot pay $800 million, and the decisions taken do not cover the full amount, but we will strive to secure it.”

“More than 50% of the budget today is allocated to salaries, and steps had to be taken to secure the funds," Jaber said.

He clarified that "public sector employees receive gasoline coupons and the state pays for it from the treasury,” adding that “30% of imported goods are exempt from VAT."

"We decided to implement the gasoline price increase immediately to prevent a black market. However, implementing the VAT increase requires legislation and will not be done immediately. Everything related to low-income earners is tax-exempt," Jaber said.

He emphasized "working on all fronts to recover treasury funds, and for the first time, orders have been issued to collect money from quarries." He also affirmed the commitment to "tax compliance and the implementation of Law 44 concerning money laundering.”

“Customs revenues have increased, and we have achieved a qualitative leap,” Jaber added.

"For the first time, we referred 200 companies to the Public Prosecutor's Office for tax evasion, and we increased customs revenues. We are working on many things to improve collection," Jaber went on to say.