The Libyan House of Representatives announced today, Sunday, a decision to reduce the tax on the official foreign currency exchange rate from 27% to 20% for all purposes.
This move follows recommendations from Central Bank Governor Nagy Issa and his deputy, Muftah Barassi, who advocated for the reduction.
The new tax policy, effective as of Sunday, outlines that the 20% tax will be added to the official exchange rate.
The decision also allows for further reductions depending on Libya’s state revenue conditions during the implementation of the policy.
Revenue generated from the foreign currency exchange tax will be directed toward funding developmental projects when necessary.
Alternatively, it will be allocated to the Central Bank of Libya’s resources for repaying public debt, by Law No. 30 of 2023 passed by the House of Representatives. The decision also allows for certain exemptions, subject to approval by the Speaker of the House, Aqeela Saleh.
This decision amends a previous policy enacted in mid-March that imposed a 27% tax on the official exchange rate of foreign currencies.
The initial tax policy was intended to last until the end of 2024, and the law was officially published in the government gazette on August 1. However, it faced legal challenges, with three court rulings suspending the policy.
The tax reduction follows a previous directive by Speaker Aqeela Saleh in March, which led the House to instruct the Central Bank to implement the foreign currency tax on a temporary basis.
