Overview:
The Association of Banks in Lebanon formally rejected the Ministry of Finance's demand to amend tax declarations for the years 2020 through 2024, citing excessive tax exposure on unrealized losses rather than profits. The dispute centers on the treatment of foreign exchange differences, bond valuation write-downs, and eurobond provision reversals. The banks argue the reassessment threatens remaining sector liquidity during an ongoing financial crisis and deposit crisis.
Details:
On September 10, 2026, the Ministry of Finance issued a directive requiring banks to revise their tax filings, particularly regarding the accounting treatment of eurobond provisions and currency evaluation losses. The Association of Banks in Lebanon responded with a formal letter to Finance Minister Yaseen Jabr outlining opposition to the procedure. The association stated the reassessment would impose taxes exceeding 600 million dollars on actual losses, not realized profits, at a time when the banking sector continues absorbing the effects of the broader financial collapse that began in 2019.
The banking institutions indicated they intend to refuse implementation of the ministry's decision. The dispute reflects deeper tensions over how financial losses accumulated during Lebanon's economic crisis should be treated under tax law, and whether institutions weakened by deposit freezes can absorb additional tax obligations without further compromising depositor protections or institutional solvency.
Outlook:
Depositors and analysts are monitoring whether the tax dispute will escalate into legal proceedings or political negotiation. A parallel concern remains the timing of a planned International Monetary Fund delegation visit to Beirut, with eurobond market prices showing modest gains this week amid anticipation of geopolitical developments and Fund engagement.