VAT, Fuel Price Hikes Could Push Living Costs Up 15%, Analyst Says

A leading Lebanese economic researcher has warned that a planned increase in the value-added tax could drive the cost of living up by as much as 15 percent, piling additional pressure on households already strained by relentless price hikes.

Mohammad Chamseddine, a policy research specialist at Information International, said living costs could rise between 12 and 15 percent if the VAT rate is increased, arguing that the measure would have a broader impact than officials suggest.

Speaking on Voice of Lebanon radio and VDL24 television, Chamseddine disputed the government’s calculations regarding fuel price adjustments, saying the real burden on consumers exceeds the announced figures.

He said the increase in the price of 20 liters of gasoline is not 300,000 Lebanese pounds, as stated by the government, but 355,000 pounds. The discrepancy, he explained, lies in the pricing formula used in the official fuel price structure, where the listed amount is subject to the current 11 percent VAT.

“The announced figure does not reflect the full cost borne by consumers,” Chamseddine said, noting that VAT is applied to the various price components included in the official pricing table.

He also pointed to rising food prices as evidence of intensifying inflationary pressures. The average cost of a fattoush salad serving five people, he said, has climbed to 400,000 Lebanese pounds, up from 285,000 pounds a year earlier.

The surge in the price of basic staples, he added, illustrates how tax hikes and fuel price increases quickly ripple through household budgets in a country still grappling with the fallout of a prolonged economic crisis.