Lebanon submitted its 2026 Draft Budget Law to the Council of Ministers, proposing wide-ranging reforms across corporate tax, VAT, customs, excise duties, digitalisation, and tax incentives, including stricter deduction rules, and targeted exemptions and incentives for key sectors.

Lebanon’s government unveiled the 2026 Draft Budget Law on 15 September 2025. It is now submitted to the Council of Ministers, in line with constitutional and statutory requirements.

The proposal, prepared before the 1 September deadline set by the Public Accounting Law (Decree No. 14969 of 30 December 1963), introduces tax reforms across corporate taxation, VAT, customs, excise duties, and enforcement mechanisms.

Corporate taxation

The 2026 Draft Budget Law regulation proposes a 3% withholding tax creditable against annual income tax, introduces fines for nondisclosure of beneficial owners, limits vehicle depreciation to USD 25,000 (except for taxis and rentals), and disallows input VAT deductions on utilities, communications, internet, and fuel.

Customs and excise duties

The Budget Law introduces a 3% customs withholding tax at import clearance and proposes higher excise duties on environmentally or health-damaging activities, as well as on monopolistic or privileged sectors such as telecoms, natural resources, and energy.

VAT

Non-registered event organisers must pay VAT within seven days of the month-end if liable under entertainment tax rules, while the 2026 Draft Budget Law limits input VAT deductions on utilities and fuel.

Other tax procedural measures

Digitalisation

  • Mandatory tax identification numbers (TINs) will be issued to all citizens and residents.
  • Digital government (e-government) rules will be introduced to expedite and simplify transactions and prevent bribery and corruption.
  • Algorithms and remote computing mechanisms will be developed to process taxpayers’ accounting data through electronic interfaces that allow for the detection of loopholes and the prosecution of tax evaders (artificial intelligence).
  • Persistent evaders will face a “name and shame” mechanism.

Exemptions and incentives

Tax exemptions for sectors like maritime, aerial transport, and banks will be removed, while new incentives will be offered for manufacturing, technology, and green projects, alongside a property tax exemption for vacant apartments.