Cash-strapped Lebanon plans to charge for WhatsApp calls

Lebanon‘s cabinet has agreed to impose a fee on calls over WhatsApp and other similar applications, as part of efforts to raise revenues in the country’s 2020 draft budget, a minister said on Thursday.

Lebanon has low growth, crumbling infrastructure and one of the world’s highest debt burdens, and is facing strains in its financial system from a slowdown in capital inflows. The government has declared a state of “economic emergency” and promised steps to ward off a crisis.

Information Minister Jamal al-Jarrah said on Thursday that the cabinet had agreed a charge of 20 cents per day for calls via voice over internet protocol (VoIP), used by applications that include FaceTime, Facebook calls, and Facebook-owned Whatsapp.

The fee could potentially bring in up to $250m in annual revenues from the country’s estimated 3.5 million VoIP users.

The country has only two service providers, both state-owned, and some of the most costly mobile rates in the region.

Lebanese TV channels cited Minister of Telecommunications Mohammad Choucair as saying the fee would “not be applied without something in return”, which he would announce next week.

Finance Minister Ali Hassan Khalil said last month there were no new taxes or fees in the draft 2020 budget he sent to the cabinet.

Lebanon is under pressure to approve the 2020 budget to unlock some $11bn pledged at a donor conference last year, conditional on fiscal and other reforms.

Prime Minister Saad Hariri has said the government would work to further reduce the 2020 budget deficit.

Foreign allies are not yet fully convinced the Lebanese government is serious about reforms, and a French envoy last month criticised the pace of work.

The government only approved the 2019 budget halfway through this year. Lebanon had until 2017 had gone 12 years without a budget.

Ahead of a cabinet session on Thursday, Jarrah said ministers would discuss a proposal to raise value-added tax (VAT) by two percentage points in 2021 and then another two percentage points in 2022, until the VAT reaches 15 percent.

After ministers agree on the 2020 draft budget, they must send it to parliament for approval.