Lebanese official proposes increase in fuel price, VAT to fund housing loans

Lebanese official proposes increase in fuel price, VAT to fund housing loans
18/09/2018 , by , in INTERNATIONAL

Central Bank Governor proposed an increase of 5,000 Lebanese pounds in the price of fuel and a hike in Value Added Tax (VAT) to solve the housing loans crisis in Lebanon.

“Salemeh refused to impose more taxes on the banking sector in a bid to secure funds for housing loans,” according to the media.

Media said that Salameh’s new proposal came during his meeting last week with the national economic, trade and industrial parliament committee to discuss ways of solving the housing loans crisis in Lebanon.

The Central Bank of Lebanon usually funds the housing loans though Public Corporation for Housing (PCH) and the housing bank. It provided commercial banks with a fund worth 500 million U.S. dollars in February, allocated for subsidized housing loans that would be used by Lebanese citizens to buy apartments.

The fund, however, was drained within a month.

The commercial banks therefore are offering housing loans with an interest rate of around six to seven percent compared to three percent for subsidized loans, making people hesitate to purchase.

As a result, some political parties voiced their concerns about this new crisis, emphasizing the need to find quick solutions to this issue.

The Finance Ministry has agreed last month to subsidize part of the interest rate on housing loans offered by PCH.

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