Cash-strapped Lebanese government faces anger against the latest tax proposal to place a 0.22 cents levy on all calls made through WhatsApp and other Voice over IP services.
Telecommunications Minister Mohammed Choucair confirmed media reports about the proposal to tax calls made through WhatsApp, Facebook, FaceTime and other popular apps after the Cabinet discussed the proposal Thursday. The proposal would reportedly cap the monthly cost at $6.
The government is discussing proposals for additional taxes for the 2020 budget in a bid to bring down the world’s third-highest debt-to-GDP level. Lebanon owes $74.5 billion to creditors – 140 per cent of GDP – and is attempting to take measures to reduce the debt and unlock international aid tied to reforms.
Government debt has been downgraded by ratings agencies and the country is running low on US dollars, with withdrawals being limited. Experts warn the country is facing a financial crisis and Prime Minister Saad Hariri says working to fix the economy is his main priority.
In 2017, the French government convened the CEDRE conference that saw countries pledge $11 billion in aid to rebuild the country’s infrastructure but contingent on a series of fiscal reforms. The Lebanese government is still working to pass the needed legislation and cut the deficit in a bid to access the money.
Among Cabinet’s proposals on Thursday was a tax on internet calls as well as an increase in value-added tax by two points in 2021 and again in 2022 bringing it to 15 per cent.
Cabinet endorsed a number of proposals Thursday, including upping the levy on tobacco products and boost security at borders to clamp down on smuggling.
But the proposal to tax internet calls was immediately criticized.
“The [Lebanese] people will not pay a single [Lebanese] pound on WhatsApp service which is their vent to swear at some politicians without being tracked,” MP Paula Yacoubian said in a statement. She urged the cabinet “to back off immediately before they become a “shameful charade”.
“But you are, as expected, ignoring all warning signs and trying to impose a tax on people instead of creating productive services… Doing the same over and over again will lead to the same result, theft and squander.”
Many Lebanese took to social media to decry the proposal.
Roland Aboujaoude, a lecture at USEK University, tweeted the “new logo” of WhatsApp in Lebanon showing the classic green box with a phone in a speech bubble above the altered app name now spelling “What$App”.
Meanwhile, Mohammed Hijazi tweeted asking why the government was planning to impose an additional fee when Lebanese phone bills are already so high.
Lebanese telecoms bills are relatively high compared to other places in the region, with 500 MB costing $10 per month, 10 GB costs $33 per month and 100 GB costs $109 with MTC Touch, one of the two state-licenced networks. Calls and other services are charged separately.
Others asked how the mechanism would be enforced, for example, if someone without a Lebanese sim-card used WhatsApp over WiFi.
Lebanese licensed telecoms companies, MTC Touch and Alga, generate hundreds of millions a year for the government, funds that are used to cover the budgets of municipalities and other services. According to reports, the companies paid the Lebanese government $1.2 billon in 2015.