The Department of Accounting and Finance at the Faculty of Business Administration and Economics (FBAE) at NDU hosted Elie Abboud, President of the Lebanese Association of Certified Public Accountants (LACPA), and Nada ElSayed Zoghzoghy, Tax Leader at PwC Lebanon, on December 4, 2024. The event addressed updates and post-crisis implications on the Lebanese tax system.
“The ultimate objective of our ongoing efforts—of which we will attempt to give you a glimpse during this session—is to rebuild a new Lebanon by establishing justice among all taxpayers,” began Abboud. He then introduced his colleague, who provided an in-depth overview of the Lebanese tax system.
Zoghzoghy explained to the audience that Lebanon’s tax law dates back to 1959, while other countries, both large and small, have updated their laws to reflect social and economic changes. She noted that this outdated law is challenging to implement, particularly due to difficulties in defining who qualifies as a Lebanese resident and for how long. Before addressing these issues, the government must enact tax reforms to create a unified, modern system nationwide.
Zoghzoghy outlined the primary types of taxes in Lebanon as follows:
- Income tax, paid by businesses and professionals.
- Personal income tax, applicable to salaries.
- Movable capital tax, related to interest and dividends, which remains difficult to enforce due to unclear definitions.
- Built property tax, imposed on owned properties.
- Inheritance tax, required of heirs, even if they are not family members.
She concluded her presentation by advising students: “You are the future of the country. That’s why you must truly understand the problematic structure in order to participate in finding solutions.
Abboud then took the stage to share additional insights. He highlighted how, during the economic prosperity of 2016 and 2017, Lebanese businesspeople confidently deposited earnings from abroad into Lebanese bank accounts, benefitting from bank secrecy laws that enabled unrestricted transactions. Meanwhile, the U.S. government implemented regulations requiring U.S. citizens to declare foreign bank accounts, a practice adopted by other governments, compelling Lebanese individuals to comply.
However, after the crisis, the situation has become chaotic, with uncertainty surrounding how many Lebanese citizens hold funds abroad and whether they are paying taxes. The Lebanese government shares relevant data internationally but does not receive reciprocal data in return.
Abboud recommended that students focus on two key areas:
1. Tax compliance—ensuring adherence to legal tax obligations.
2. Tax planning—developing strategies to avoid illegal practices such as tax avoidance or evasion.
He referenced a report by the International Monetary Fund (IMF) compliance team, which revealed a 40-48% tax evasion rate among local businesses across various industries. This underscores the urgent need for expert intervention and educating younger generations to address these issues.
Abboud highlighted a proposed national solution by the LACPA: implementing blockchain technology to ensure all trading operations automatically pass through an e-automated billing system at the Chamber of Commerce. This project has received strong support from the Prime Minister and is awaiting final approval.
“It’s time to build a nation,” concluded Abboud, emphasizing the importance of identifying ethical individuals to lead such a fundamental economic strategy within Lebanon’s political framework. Achieving this requires both political and national will to implement reforms, ultimately fostering complete transparency for local and international stakeholders.