HoR votes to axe dollar tax this year

The Libyan House of Representatives has approved the elimination of the dollar tax by year-end, though the final decision remains subject to Central Bank oversight, according to House member Abu Salah Shalabi.

Speaking to Al-Ahrar TV channel, Shalabi emphasised that whilst House Speaker Aguila Saleh has approved the tax cancellation, the authority to modify exchange rates and fees ultimately rests with the Central Bank’s Board of Directors.

The controversial foreign currency fee was initially implemented at the behest of the former Central Bank Governor during a period when the bank lacked a functioning Board of Directors, Shalabi explained.

The announcement follows a series of recent reductions in the foreign currency tax. The Central Bank has already instructed commercial banks to implement Speaker Saleh’s directive to lower the tax to 15%, whilst encouraging streamlined procedures for documentary credits across all sectors.

This latest development marks the second reduction since October, when the rate was cut from 27% — a figure established in March — to 20%. On 20 November, Saleh approved a further reduction to 15% for all transactions.

The existing legislation includes provisions for potential adjustments based on state revenue conditions and allows for tax revenues to fund development projects or supplement bank resources when necessary.

The foreign currency tax has been a significant economic policy tool in Libya’s monetary system, with its gradual reduction reflecting shifting economic priorities and market conditions.