Lebanon’s 2027 Budget Wants to More Than Double Tax Revenues

Lebanon’s government has approved a 2027 budget built around an extraordinary proposition: take dramatically more money from an already exhausted population.

The draft budget expects tax revenues to rise by more than 100% compared with what the state collected in 2024.

This is happening in a country where households already pay for private generators because electricity remains unreliable, private education because public schools struggle, private healthcare because state provision is inadequate, water deliveries because infrastructure fails, and increasingly expensive transport just to get to work.

Now the government wants considerably more tax revenue on top of all that.

The draft, approved by Cabinet and sent to Parliament, sets spending at roughly LL615 trillion, or around $6.9 billion. Taxes are expected to provide nearly 86% of government revenue. To reach that target, collections would have to more than double from the approximately $3.41 billion raised in 2024.

That should raise an obvious question.

What exactly has the Lebanese state done to deserve twice as much money?

Lebanon is not emerging from a period of successful reform.

Its banking system remains unresolved seven years after the financial collapse.

Depositors still cannot freely access large portions of their own money.

Electricity remains unreliable.

Public infrastructure continues to deteriorate.

Government institutions remain overstaffed in some areas, dysfunctional in others and deeply shaped by the political patronage system that helped produce the crisis in the first place.

Yet the state’s response is increasingly familiar: raise fees, tighten collection and demand more from taxpayers.

This is not serious reform by itself.

It is revenue extraction.

The government officially projects a balanced budget for 2027.

On paper, that sounds responsible.

Lebanon cannot return to the pre-2019 model of enormous deficits financed through borrowing, financial engineering and eventually monetary collapse.

But balancing a budget is not impressive if it is achieved mainly by taking more money from a shrinking productive economy while leaving the structure of government largely intact.

More than half of government expenditure is expected to go toward public-sector wages, salaries and social benefits.

Capital spending, the money that could actually improve roads, infrastructure, utilities and the productive capacity of the economy, remains a much smaller share.

That tells Lebanese taxpayers something important about the priorities of the budget.

The state is asking for significantly more revenue largely to sustain itself.

Public-sector workers have legitimate grievances.

Their salaries were destroyed by the collapse of the Lebanese pound, and many government employees now earn a fraction of what their compensation was worth before 2019.

But Lebanon cannot solve that problem simply by transferring ever more money from the struggling private sector into an unreformed public system.

Eventually, somebody has to produce the wealth being spent.

And in Lebanon, that burden increasingly falls on workers, businesses and families already operating in one of the most difficult economic environments in the region.

The 2027 budget includes several measures intended to improve tax compliance.

Payroll declarations would be linked more closely with National Social Security Fund records.

Foreign digital companies would face stronger VAT obligations.

Consumers could even be encouraged to demand receipts through a lottery system intended to reduce undeclared sales.

Some of that makes sense.

Lebanon does have a serious tax-evasion problem.

The informal economy is enormous, and businesses that actually comply with the law should not have to compete against companies that simply avoid paying taxes.

But enforcement is only fair if it applies broadly.

Otherwise, the result is predictable.

The formal economy becomes easier to tax because it is visible.

Salaried workers are easier to tax because their income is recorded.

Established businesses are easier to tax because they have accounts.

Meanwhile, cash businesses, politically connected interests and parts of the informal economy remain much harder to reach.

The draft itself raises uncomfortable questions.

Income-tax receipts from salaries and wages are projected to rise by roughly 66%.

Tax revenue from business profits is expected to increase by far less.

Fees are also rising sharply.

The cost of issuing a national identity card, for example, jumps from LL5,000 to LL1 million.

Some adjustment is obviously necessary because many government fees became meaningless after the pound collapsed.

But Lebanese citizens have heard this argument before.

Every failure eventually becomes another fee.

Electricity does not work properly, so households pay generators.

Water infrastructure fails, so families pay private suppliers.

Public transportation is inadequate, so workers pay for cars and fuel.

Government finances deteriorate, so taxes and fees rise.

At some point, the question becomes what the taxpayer is receiving in return.

Lebanon’s political system has spent decades accumulating layers of public employment, subsidies, inefficient institutions, politically protected interests and administrative duplication.

Corruption and patronage are not side issues in Lebanon’s economic collapse. They are central to understanding why the state became so expensive while delivering so little.

Yet serious attempts to dismantle that system remain far less visible than attempts to increase revenue.

There has been no comparable national campaign to radically reduce waste.

No comprehensive restructuring of Lebanon’s bloated administrative apparatus.

No completed resolution of the banking collapse.

No convincing demonstration that political parties are willing to dismantle the patronage networks through which state resources have historically been distributed.

Instead, the Finance Ministry is setting dramatically higher collection targets.

The state is effectively telling Lebanese citizens: trust us with more.

That is a difficult argument to make after 2019.

A functioning country absolutely needs taxes.

Lebanon cannot rebuild roads, fund the army, maintain courts or provide infrastructure without revenue.

Nor can tax evasion remain a national sport.

But taxation depends on legitimacy.

People are far more willing to pay when they believe the state is competent, services function and public money is being used responsibly.

Lebanon has not yet rebuilt that bargain.

The government is trying to rebuild the revenue side first.

That is backwards.

The priority should be making government smaller, cleaner and more effective.

Cut waste.

Digitize public administration.

Consolidate redundant institutions.

End politically protected privileges.

Bring the informal economy into the tax base.

Complete the banking restructuring.

Improve electricity and infrastructure.

Create conditions for private investment and economic growth.

Then government revenue can rise because the economy is expanding and more people are participating in the formal system.

What Lebanon should not do is treat struggling households and productive businesses as an unlimited source of money for a state that has not adequately reformed itself.

A country does not tax its way out of economic collapse.

It grows its way out.

The 2027 budget risks getting that order exactly wrong.