VAT revenues collected on domestic transactions fell sharply in the second quarter of 2026. According to Al Akhbar of 2 November 2026, they decreased by 45.9 per cent compared to the same period of 2025. This figure indicates a deterioration in receipts, but does not directly measure an equivalent drop in consumption. The timing of tax payment disrupts the comparison. In order to assess the trend, the results of the semester must therefore also be examined and local operations distinguished from imports.
The daily newspaper is based on the Ministry of Finance’s report for the first half of 2026. It brings tax data closer to the decline in passenger arrivals and to commercial and tourist difficulties. The whole describes a weakened local economy. It also shows why some revenues can progress without a general recovery.
A sharp fall in the second quarter
Al Akhbar reports that VAT on domestic transactions increased from £25,100 billion to £13,600 billion. These amounts relate to the second quarters of 2025 and 2026 respectively. The decline is thus 45.9 per cent. At the same time, VAT on imports decreased by 6.2%. All components combined, VAT revenues fell by 24.7% over the quarter.
The two methods of collection therefore do not evolve at the same rate. The decline is much greater for domestic operations. This difference deserves attention because the revenue concerned is related to taxable sales and services made in the country. They are sensitive to the level of activity and consumer spending. However, the time when the state collects the tax can also significantly change the result of a quarter.
Tax deferral distorts annual comparison
In 2025, the Ministry of Finance extended the deadline for reporting and paying VAT in the fourth quarter of 2024 until 20 June. According to Al Akhbar, this postponement had moved some of the receipts towards the second quarter of 2025. The period used as a point of comparison thus includes staggered payments, not all of which correspond to an activity carried out during those three months.
This timing effect makes quarterly reading difficult. An exceptionally high recipe during the reference period may increase the decline one year later. The daily also mentions a 126.3 % increase in domestic VAT in the first quarter of 2026. It calls for taking account of these collection movements to understand the succession of a strong progression and a marked fall.
Semester confirms gap between internal market and imports
The examination of the first semester allows the quarter to be placed in a wider period. According to Al Akhbar, VAT collected on domestic transactions decreased by 10.8%. It stands at £28,100 billion for the first six months of the year. The decline therefore remains on a semi-annual scale, although it is much less pronounced than in the second quarter alone.
On the other hand, VAT collected on imports follows another direction. It increases by 2.5% to £52,700 billion. Approximately 65% of the VAT revenue for the six months thus comes from the collection at the entrance of the goods. Domestic operations account for the remaining 35%. This breakdown describes the origin of the tax collected; It does not constitute a direct measure of the share of imports in all economic activity.
The contrast is important to assess the budgetary situation. An increase in revenue at the border may mask a weaker development in the internal market. It is not sufficient to establish that businesses sell more or that households have more resources. The various components of VAT must be examined separately before assessing the activity.
Import VAT does not measure final sales
Al Akhbar recalls that the domestic tax depends on taxable transactions carried out on the local market. Import VAT is collected when goods enter Lebanon. Its evolution depends in particular on the value of the goods and their composition. It does not necessarily reflect the pace at which these products will then be sold to consumers.
The daily also places these movements in a context of rising prices after the regional war, particularly oil. He referred to the effects of this increase on the Lebanese market. The increase in the price of goods adds another factor to the reading of receipts, alongside the quantities and the tax schedule.
Less travellers, less expenses related to stays
Tax revenues are not the only indicator examined. Al Akhbar cited a 37 per cent decrease in arrivals to Lebanon during the first half of the year. The number would have increased from about 1.6 million to 1 million. These figures are derived from the Bank of Lebanon data contained in the report of the Ministry of Finance. Departures declined by 27.4%.
The daily estimates that the decrease in arrivals probably affected several activities: accommodation, catering, trade and tourist services. These expenditures contribute to domestic tax collection. The approximation therefore reinforces the assumption of weakened consumption, without allowing to measure exactly the share of the VAT fall attributable to each sector.
Increases in levies are not sufficient to prove a recovery
The variation also covers all tax revenues. According to Al Akhbar, they grew by 45.1 per cent in the first quarter, before falling by 12.7 per cent in the second. At the same time, some import and fuel revenues continued to rise with the effect of higher rates. In this way, collection can benefit from a change in sampling while activity remains fragile.
This difference is central to public finances. More revenue can come from higher taxes, and not necessarily from more sales. The newspaper believes that such support can compensate part of the losses for a period of time. It points out, however, that it does not demonstrate a recovery in consumption or an extension of the economic base that generates revenue.
Sources
Al Akhbar, November 2, 2026, page 5.
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