Lebanese banks oppose wealth tax on alleged $600M in fake profits
The article discusses the Lebanese Banking Association's rejection of the Ministry of Finance's imposition of taxes on bank profits resulting from fictitious losses exceeding $600 million. These losses are related to eurobond bond coupons and exchange rate differences. The association views the deadline set by the ministry for amending tax declarations as impractical due to the scope of the required adjustments and calls for its suspension and the resumption of negotiations. The association emphasizes that imposing these taxes amid the current financial crisis—especially after bank assets have shrunk from $20.6 billion in 2019 to $5.4 billion—will worsen the situation and make liquidity management more difficult. It also points out that defining profits based on exchange rate differences is a matter of controversy, opposing the use of an unrealistic exchange rate and asserting that taxing non-real losses violates Lebanese laws. The association stresses that the dispute centers on whether exchange rate differences should be considered taxable profits or actual losses, and underscores the need to respect the law and the legal rights of banks in response to the ministry's decisions.
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