The road that was never taken

The definition of reform in the dictionary is “making changes to something in order to improve it.” [inlinetweet prefix=”” tweeter=”” suffix=””]It seems the fiscal situation in Lebanon has reached a point where no amount of changes can improve it.[/inlinetweet] The challenge has become insurmountable and the country’s finances might fall into a permanent failure trap that might persist for many years. Let’s look into the major categories of revenues and expenditures historically in Lebanon. State treasury revenues are generated, in order, by income taxes, value-added tax (VAT), state owned enterprises (SOEs), customs and excises, and real estate registration. Down, down, downAll treasury revenues in Lebanon were collected at levels far below their optimal level due to endemic corruption; corporates and individuals rarely declared the right level of their income or real estate transactions. Customs and excises generated approximately half of the expected revenues, the VAT tax gap reached around 80 percent,