Fiscal Year 2025
Capacity Development Activities
Public Financial Management
Cash Management
Together with the Fiscal Affairs Department, METAC supported Lebanon’s authorities in December on cash management to address increasing spending pressures during the war. The mission fostered cross-agency collaboration, welcoming participants from the Ministry of Finance and the Central Bank. The mission focused on government banking arrangements, cash forecasting, and reporting. It provided practical recommendations that were achievable within the current crisis context and highlighted the importance of establishing a Cash Management Committee to improve coordination and cooperation, data collection, and to support policy level decision-making. The mission also provided recommendations on budget execution and controls for strengthened crisis management and discussed budget credibility issues that adversely affect cash management.
Revenue Administration
Training on Customs Enforcement Issues
This CD training to Lebanon Customs Authority (LCA) participants on 13-16 May was co-delivered and cost shared with the International Centre for Migration Policy Development (ICMPD). METAC’s Customs Administration Advisor presented Customs Intelligence practices and the concept of National Risk Targeting Centers, while ICMPD advisors covered Risk management, Post Clearance Audit, and Vessel/ Container tracking.
Tax and Customs Cooperation
A workshop on tax and customs cooperation was held in Beirut in June 27-28, co-organized by FAD and METAC tax and customs advisors. Very productive discussions covered the concepts of identifying, prioritizing, and addressing common risks and the institutional framework required for information exchange and joint activities aimed at improving compliance and increasing revenue mobilization.
Legislative Review Workshop
In response to a request from the Deputy Prime Minister (DPM), this workshop, held at the METAC office 24 June to 3 July, assisted the Lebanese Customs Administration (LCA) to identify gaps in current customs legislation. Five LCA representatives, were supported on the (i) review of the customs law; (ii) development of recommendations for amendments to align the law with international standards; and (iii) planning for an implementation road map. World Bank representatives joined in person and online. The next step is to formally present workshop outcomes to the DPM and LCA, suggesting a prioritized list of amendments and proposing FAD / LEG support to assist with drafting, consultations, and implementation.
Reform Management
The Lebanese Ministry of Finance was supported in its reform agenda by METAC's Reform Management Mission during July 1-5. Despite the complicated economic and political context, the Lebanese tax authorities are moving towards reforming the existing tax administration organization with the large taxpayer project as a pilot. The mission conducted a comprehensive environmental scan and analyzed the possible alternative approaches to reform, engaging with key stakeholders and identifying the main challenges and basic prerequisites for successful change management.
Employing Data Analytics in the VAT and Direct Tax Directorates
An offside mission to Egypt in January allowed the Lebanese officials to work closely with the two resident tax advisors, who explored data analytics in both the VAT and direct tax directorates. The team had a productive collaboration not only to analyze compliance data, but also to explore the Risk Differentiation Framework (RDF) - a digital tool that allows the automated profiling of a large group of taxpayers to better observe their tax compliance. A useful overview of the current architecture of the databases and possibilities for future automation were also discussed during the mission.
Real Sector Statistics
Compilation of GDP Estimates for Financial Corporations
At the request of Central Administration for Statistics of Lebanon, METAC assisted the national accounts team during 22-26 July with reviewing the source data and improving the compilation of GDP estimates for financial corporations, to ensure that international best practices are applied.
Tax Policy
Review of the draft income tax law
Continuing the ongoing engagement to assist Lebanon in developing a new income tax law, a joint METAC – HQ mission during 14-18 October conducted a review of the draft income tax law and suggested legal drafting and tax policy options.
Income Tax Law Draft
During 5-7 December, an IMF-METAC team met with the Lebanese authorities to discuss a new income tax law draft, building on ongoing CD to improve taxation in Lebanon. High-level key issues included modernizing the tax law structure, revisiting the income tax architecture, protecting the tax base with the appropriate up-to-date anti-tax avoidance rules; and revisiting the design of tax incentives to improve their efficiency and effectiveness.
