Abdul Hamid Dbeibeh, Prime Minister of the Tripoli-based Government of National Unity, has rejected a joint decision by the House of Representatives and the Central Bank of Libya to impose tax on foreign exchange rate.
Speaking on Sunday during a fast-breaking dinner hosted by the government for members of parliament and the High Council of State among other representatives, Dbeibeh said the decision would have “negative consequences” on the Libyan public.
On Saturday, House Speaker Aguila Saleh approved a request from the Saddek El-Kabeer, the governor of the central bank, to impose a tax/fee/levy of 27 percent on the current official LD exchange rate.
The new flexible rate would allow the CBL Governor to sell the US dollar at a range from LD 5.95 to LD 6.15 – depending on market conditions. The current official exchange rate is LD 4.95 per dollar. The parallel black-market rate was LD 7.26/dollar earlier this week.
The “decree”, unilaterally issued by Saleh, was not introduced for a vote on the House floor. It is valid until the end of 2024 and prescribes that revenues generated from the 27 percent fee are used to “cover the expenses of development projects and repay the public debt.”
The move comes amid an apparent rift in the relationship between the Tripoli-based government and the central bank. In late February, El-Kabeer and Dbeibeh engaged in tit-for-tat accusations over public spending spurred by recent spike in USD/LD exchange rate in the black market.
El-Kabeer publicly released a letter addressed to Dbeibeh, urging the premier to cut spending. On the other hand, Dbeibeh claimed that his government’s spending has been measurable and helped reduce public debt while accusing the central bank’s governor of issuing selective policies tailored to his interests.