The Minister of Finance had announced that the customs on cars would initially be calculated in the budget at the current realistic price of the dollar (about 20 thousand pounds) instead of the price in force in state financial institutions, which is 1,500 pounds.
The government’s fiscal and tax plan comes within an approach to the conditions imposed by the International Monetary Fund in order to secure the economic recovery plan and secure financial resources for the state treasury.
The parallel (used) cars sector constitutes an important resource for the treasury, as well as a source of livelihood for thousands of Lebanese families. It provides the treasury with about 600 million dollars annually, according to what a source in the Used Car Importers Syndicate told Sky News Arabia, and is considered the second source of revenue from the port after the oil sector.
The used car market in Lebanon has been very active for years due to the decline in the ability of the Lebanese citizen to buy new cars, and it focuses on importing used cars that are no more than 5 years old from European countries and the United States.
“Destructive” decisions
In statements to the media, Walid Francis, head of the Syndicate of Owners of Used Car Showrooms, said that raising the value of customs on imported cars, if approved, as in the draft budget, “will increase the fees more than 10 times, and that any small imported car that is about 5 years old will result in it.” Exorbitant customs amounts… For example, a car whose customs value was 5 million pounds will become, according to the new customs dollar, 80 million pounds, and there are luxury cars whose customs price will exceed one billion pounds.”
Francis added that “the government’s decisions are destructive to the sector,” noting that “in the event that the customs dollar rises by 40 percent, most of the exhibitions will close their doors.”
According to a source in the Syndicate of Used Car Importers in Lebanon, “the size of the sector decreased from 2,200 showrooms to around 550, and the number of imported cars decreased from 80,000 in 2010, to 40,000 in 2019, and only 5,000 cars in 2020”.
The significant decline in the Lebanese currency exchange rate was accompanied by a rise in fuel prices in 2021, and this prompted car importers to import those economical ones with small engines.
In information for “Sky News Arabia”, it was found that many car importing companies hid their cars in warehouses, waiting for the customs dollar to approve the high price to double their profits.