The Caretaker Minister of Finance Dr. Youssef Khalil recently submitted to the government the draft budget law for the year 2025 targeting a deficit of LBP 17,567 billion ($196 million at the LBP 89,500/USD exchange rate, 4.11% of budgeted expenditures), noting that the year 2024 budget law targeted a zero deficit. The Ministry of Finance is planning to finance the target deficit internally through the issuance of treasury bills. In details, the budget anticipates revenues at LBP 410,128 billion ($4.58 billion) and expenditures at LBP 427,695 billion ($4.77 billion). It is worth noting that in accordance with the practice established in recent years, the 2025 budget law does not include an advance to Eléctricité du Liban (EDL) after the latter revised its tariffs to stand above production costs. Said target figures compare to LBP 308,435 billion (32.97% increase) in government revenues and LBP 308,435 billion (38.67% rise) in budgeted expenditures in the 2024 budget law. Revenue wise, the projected increase is mainly attributed to modifications in the way taxes are calculated and to increases in existing taxes/penalties, and does not embed in the introduction of new taxes. The draft budget suggests a high contribution from tax revenues of LBP 326,416 billion, representing 79.59% of total revenues, with non-tax revenues (LBP 83,712 billion) expected to represent 20.41% of target revenues. Delving into details, levies on goods and services (LBP 191,266 billion) are budgeted to be the major contributor (46.64%) to total revenues, with the share of income taxes (LBP 43,109 billion) and levies on international trade (LBP 50,684 billion) accounting for 10.51% and 12.36% of total revenues respectively. It is worth noting, in this perspective, that non-tax revenues represent revenues from state owned enterprises such as Casino du Liban, ports, the airport and the telecom sector among others. The draft law introduces a fee on every receipt issued by the Lebanese Republic (LBP 100,000 on local currency receipts and $2 on USD denominated ones), and also adds a LBP 100,000 fee on invoices issued by the Ministry of Telecommunications. The draft budget also suggests permitting the use of e-stamps for all stamps that range between LBP 2 million and LBP 3 billion in an endeavor to alleviate the shortage in stamps, whereby citizens are having to resort to the black market to get stamps, paying multiples of the price in the process. The draft law also amends the way taxes on wages and salaries are calculated for employees that get partly or fully paid in USD, whereby the USD-denominated portion of the salary will be multiplied by the exchange rate set by BDL, and added to the LBP portion of the salary & then applying the tax brackets on the whole salary in LBP. On the expenditures front, social benefits account for over one-quarter of (27.04%) of total budgeted expenditures, followed by salaries & remunerations (22.39%) and administrative expenses (11.85%). Other significant expenditure items include, transfers to NGOs (10.12%) and capital expenditures (9.79%) mainly in the form of governmental expropriations.