Lebanese Cabinet Approves 2026 Draft Budget Amid Economic Reform Push

Cabinet Greenlights 2026 Budget in Beirut

The Lebanese Cabinet, under the leadership of Prime Minister Nawaf Salam, officially approved the draft 2026 state budget on Monday, September 22, 2025. The decision was made during a session held at the Grand Serail in Beirut, marking a significant step in the country's ongoing efforts to advance long-delayed economic reforms. The approval comes as Lebanon continues to navigate a severe economic crisis that has persisted since 2019.

Key Fiscal Measures and Objectives

The approved draft budget targets a zero deficit, with projected revenues and expenditures each set at LBP 505.72 trillion, equivalent to approximately $5.65 billion at the current exchange rate of LBP 89,500 per dollar. This represents a 13.59% increase compared to the 2025 budget figures. According to Information Minister Paul Morcos, the budget does not aim to introduce new taxes or increase existing tax rates. Instead, the focus is on:

• Strengthening compliance with tax obligations.
• Accurately estimating revenues.
• Combating tax evasion and customs smuggling.
• Improving overall tax collection mechanisms.

Finance Minister Yassine Jaber had previously submitted a balanced draft budget to the government, emphasizing these principles. Levies on goods and services are anticipated to be the primary contributor to total revenues, accounting for 52.76%. The budget also includes provisions to increase penalties by a factor of 25 times and enhance reporting obligations related to ultimate beneficial ownership, measures designed to combat money laundering and align with international best practices. Notably, the 2026 budget will not include an advance to Eléctricité du Liban (EDL), as the utility's tariffs have been adjusted to cover production costs.

Context of Economic Reforms and IMF Engagement

The approval of the 2026 draft budget is seen as crucial for Lebanon's broader economic reform agenda. The country has been in discussions with the International Monetary Fund (IMF) for a comprehensive reform program aimed at stabilizing its battered economy. An IMF delegation is expected to visit Lebanon to continue these talks, with the budget's fiscal discipline being a key point of review. The IMF has consistently stressed that any additional public spending must be fully offset by corresponding revenue efforts, particularly through enhanced enforcement and compliance in tax and customs administration.

Discussions during the cabinet sessions also addressed social demands, particularly from military personnel and teachers who have staged protests. The government has pledged to address these 'necessary and legitimate' needs while carefully avoiding a repeat of past costly salary scale reforms.