Tariff hike squeezes struggling Lebanese as reforms stall

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Every time a part of his old grey Mercedes breaks, 62-year-old Beirut cab driver Abed Omayraat faces a tough choice: go into debt to import an expensive car part, or raise fares for customers whose wallets are already drained by a severe economic crisis.

It's a dilemma he says has become more acute in recent months as Lebanon's government moved to increase tariffs on imported goods about ten-fold in a country that ships in more than 80% of what it consumes - including spare parts he needs.

With foreign currency coffers dwindling, the state has already lifted subsidies on fuel and most medication. The tariff jump came into effect on Dec 1. Import taxes began being calculated at an exchange rate of 15,000 Lebanese pounds per dollar instead of the old 1,507, meaning traders suddenly had to pay much more to bring in products like home appliances, telephones or car parts.Omayraat says many passengers already ask for discounts to the standard 40,000 L.L. ride fee.

"You need to work four to five years just to be able to afford the customs rate on a car now," said Fares, who estimated fees to import one used car could average 94 million Lebanese pounds - or about 156 times the minimum monthly wage. "When you announced it three months ago, it's as if you are going and telling those who don't want to work right in the market: go find a way to benefit. And this is what happened," he said.

 

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