Part 4: Case Study (7 marks) New payroll tax in Lebanon: What it will change The 2022 stale budyed - the firs since 2020 and almont 11 months evendac - weat iemo effiet on Nov Among the tax emeavares contained in the bodect afe a series of changes in she aiculubige of incuese tas are designed to adpast the Lebanese law to the financial reality of the oxing. which has heen arap? with an acute eccoomic orisis sinoe 2019. Specifind by a senes of decisins inand by carctace Fin Minister Youssef Khalil, these tas amendments affect bod cmployees and engliyers and ane desc frum all sides. The measures decided on by the caectaker governmeer of Mapib Mikn and appeoved by the MPMa adopted the 2022 budgot are articulated in three prowidion. The firnt - imder Article 33 - increase seven progressive brackets for taxes on saliries, wages and pencions, but withed changing the applin tac refes, which are seccessively 2, 4, 7, 11, 15, 20 , and 25 peromt for monthy alary aments. Prior t 2022 budget, the seven brackets of takable income after allowances ia cat set ly law, aceveling in Implications for entployces These chaness sigaificandly increase the amount in tases that employors who have bocm frocm raises o paid partly in fitsh dollars must pay lo the ax authorities They may also increase the amoeint in coeltributses that coployers huve lo pery lo the National 5 Security Fusd (NSSF), althouph no decisse has yet heen issued by the firatee mitinter so clarif specific consequences. Somoote who earbs abeet the same as befiee the crisis in teal tents - is, it lask dellar egeivalen will pay more takes, both in hirs and in dollars, even theugh their purchasint peracer will toll be crodk. inflase in lira and dollars. The tax payable was therefore L. $7,500, accondies to eur calculations verified wid an accuastant qe. anonymously. Thaf's $38 at the official rate and $1,40 at the LL,41,000 take. After the 2022 budget took effect, the same 51,000 thesh walary a worlh mate than 11.30 .3 mallion a current Sayrafa rate (1.1.30, 360 to the dotlar). and the tax icvy nises to 1.1.352.000 = equivalent of $86 in fresb dollan. Using the same methodolog, the tax liability on a salary of 51,000 in hank dollark fecenvertikle at LLe to the dellar) is 1.1.437.500 er $10.60 frrsile dollark. Implications for employers The consequences of this change for the cmploger are cequally sijgnificant, as the hriclets apply rctrouct from lan.1,2022. The axable income, treen which the eroployer mest calculate the contributices so he paid so the NgSF as the 8.5 peroent to be pasd for cod-of-service allowances, to name bet a fros, aseld be multiplicd by than five for salaries paid in bank dollars (L.L. 000 rate) and by 20 for thone puid in fresh dolas buse. Sayyafa. "The comsequences ace immeasurable for the caleulation of end-of-eerviee henefink, =fich i pash some coerpanies into bankruptey. An uabulanced system Not sily do these changes poecntially explode the puyroll taxes of employers obs have.

1. Part 4: Case Study (7 marks) New payroll tax in Lebanon: What it will change The 2022 stale
budyed - the firs since 2020 and almont 11 months evendac - weat iemo effiet on Nov Among
the tax emeavares contained in the bodect afe a series of changes in she aiculubige of incuese tas
are designed to adpast the Lebanese law to the financial reality of the oxing. which has heen
arap? with an acute eccoomic orisis sinoe 2019. Specifind by a senes of decisins inand by
carctace Fin Minister Youssef Khalil, these tas amendments affect bod cmployees and engliyers
and ane desc frum all sides. The measures decided on by the caectaker governmeer of Mapib
Mikn and appeoved by the MPMa adopted the 2022 budgot are articulated in three prowidion.
The firnt - imder Article 33 - increase seven progressive brackets for taxes on saliries, wages and
pencions, but withed changing the applin tac refes, which are seccessively 2, 4, 7, 11, 15, 20 ,
and 25 peromt for monthy alary aments. Prior t 2022 budget, the seven brackets of takable
income after allowances ia cat set ly law, aceveling in Implications for entployces These chaness
sigaificandly increase the amount in tases that employors who have bocm frocm raises o paid
partly in fitsh dollars must pay lo the ax authorities They may also increase the amoeint in
coeltributses that coployers huve lo pery lo the National 5 Security Fusd (NSSF), althouph no
decisse has yet heen issued by the firatee mitinter so clarif specific consequences. Somoote who
earbs abeet the same as befiee the crisis in teal tents - is, it lask dellar egeivalen will pay more
takes, both in hirs and in dollars, even theugh their purchasint peracer will toll be crodk. inflase
in lira and dollars. The tax payable was therefore L. $7,500, accondies to eur calculations
verified wid an accuastant qe. anonymously. Thaf's $38 at the official rate and $1,40 at the
LL,41,000 take. After the 2022 budget took effect, the same 51,000 thesh walary a worlh mate
than 11.30 .3 mallion a current Sayrafa rate (1.1.30, 360 to the dotlar). and the tax icvy nises to
1.1.352.000 = equivalent of $86 in fresb dollan. Using the same methodolog, the tax liability on
a salary of 51,000 in hank dollark fecenvertikle at LLe to the dellar) is 1.1.437.500 er $10.60
frrsile dollark. Implications for employers The consequences of this change for the cmploger are
cequally sijgnificant, as the hriclets apply rctrouct from lan.1,2022. The axable income, treen
which the eroployer mest calculate the contributices so he paid so the NgSF as the 8.5 peroent to
be pasd for cod-of-service allowances, to name bet a fros, aseld be multiplicd by than five for
salaries paid in bank dollars (L.L. 000 rate) and by 20 for thone puid in fresh dolas buse.
Sayyafa. "The comsequences ace immeasurable for the caleulation of end-of-eerviee henefink,
=fich i pash some coerpanies into bankruptey. An uabulanced system Not sily do these changes
poecntially explode the puyroll taxes of employers obs have iacieined mimber of employes
daring the crisis of paid thein in lresh dollars to offict the collapte of the curs but alse sharply
increaie the tases paid by privale sechor employees who sill face an ever-encreaing of living.
Meanmeile, authoritics defend thits updaste as a necessary evil th adfat at uabalasced tas systcm.
Speaking ee television a weck abo, Director General of F Fance Mohanuad Laeny Hay Shelade

2. saic rate and 5115 at the parallel macket rate) paid mote incerme tax duat a prinate emeloyee
who was $2,000 fresh fi.1.3 million declared at the efficial rate, but worth 1.1 .82 milhice at the
black market ratel 5OURCE: Pailippe HAGE BOUTROS, 05 Destmber 2022
hetps:Ateday.loricstlejeurcomiarticle't3M0503 new-payroll-tak-nhat-li-eill-etange.lhtmit 1 ee
yoar knowledge and the information within the article above, animer the fallsmiag qwestians:
Exiract from the article the majos changes regarding the tases imposed with in the new puklic
bealyat ark) What can be the implications on the private and fublic enpleyees? ( 2 maks) How
can the employers be affected by such taxes? ( 2 marke) What do you suggest to make these ax
measures moec efficieat? Justify your assect (2 anduy