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Lebanon 'open for business' by August 1 |
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Written by Daily Star
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Head of reform project promises to slash cost and time of start-ups by 45 percent
The time and cost to register a business in Lebanon will be cut by about 45 percent on Aug. 1, the director of the Business Registration Simplification (BRS) project promised on Friday. The agencies involved in registering enterprises are signing off on the changes, and everything will be in place by the end of July to implement the reforms, said BRS project director Georges Nicolas.
"I guarantee by July 31 you'll have everything from me," Nicolas told Finance Minister Jihad Azour and Economy and Trade Minister Sami Haddad during a workshop at the Grand Serail on improving administrative procedures for businesses.
The BRS project and the workshop were sponsored by the International Finance Corporation (IFC), the private-sector arm of the World Bank.
The workshop also featured a presentation on public-sector barriers to investment in Lebanon, a study which provoked fierce criticism from Azour and Haddad. Haddad, however, praised efforts to reduce the waste involved in registering a business and attaining a license.
"The licensing regime is seen as one of the many impediments to setting up a business," Haddad said.
He cited a study which found that completing the bureaucratic requirements to set up a company in Lebanon takes 275 days. In the member countries of the Organization for Economic Cooperation and Development, in comparison, the same procedures take an average of 149 days.
"Many things have to be done," he added.
According to government officials, the 45-percent reduction in Lebanon's registration burden would not require amending any legislation. Parliament has not met this year, but when the legislature begins functioning again, the BRS project will prepare bills which could reduce the time and costs of registering a business by 90 percent, Nicolas said.
The changes planned for August would allow prospective entrepreneurs to gather all necessary forms at any branch of LibanPost. After preparing the required documents, visiting a notary and setting up a bank account, they would submit all the paperwork and pay all fees again at LibanPost. These short-term reforms could cut the registration process to six days and costs to about $2,000, Nicolas said.
When talk of reducing barriers turned to taxation, Azour attacked the study, which also examined the processes for acquiring business licenses and building permits.
While agreeing that the Lebanese tax code needs an overhaul, Azour ripped the information in the report. He argued that he had implemented many of the changes the report recommended, and that others were far off-base.
"I have serious doubts about all the work that has been presented here today," Azour said. "I have serious doubts about the work when it comes to the quality of information. There are dates or fees which are wrong.
"Many things you are recommending have already been done and published. All your study is outdated."
Azour said that a new draft of the tax code, now languishing in Parliament, has many revisions going beyond those mentioned in report. Even without the revised code, he said, the ministry has moved past the decentralization called for in Friday's study, as all taxes can be paid at branches of LibanPost.
"My comments are on the quality of the report, not the issues," Azour said. "My comments are not to say that those issues don't exist. We knew that before. All of these [issues] were known before for years. What I'm mentioning are not differences in perception. It's information that is wrong."
For example, he said, the Finance Ministry's research concluded that payers of the value-added tax (VAT) are not in favor of monthly VAT filing, which Friday's study recommended.
The IFC's country director for Lebanon, Julia Brickell, said she understood Azour's "frustration" at seeing "yet another study from yet another donor." She welcomed his feedback, saying it enabled the IFC to concentrate on areas where stakeholders agree reform is necessary.
By Michael Bluhm
Daily Star staff
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