Profits of Merchants -Established by law but unenforced due to absence of government
A close examination of this issue shows that the Lebanese law does determine the profit rates, but merchants take advantage of the absence of supervision and accountability to overstep them. Ironically, all this happens in a country that takes pride in its free economic system, which, in principle, should pave way for free competition rather than monopoly and reduce prices rather than raise them.
Determination of profit rates
Lebanon has several legislations (laws, decrees and decisions) to prevent monopoly, promote market competition and determine the profit rates for traders. Of these is Decision no. 277 dated June 15, 1972, which was issued by Anwar Sabbah, the then Minister of Economy and Trade and specified the maximum allowed profit rates on commodities depending on how they were being sold: wholesale, semi-wholesale or retail (see Table 1).
The decision stipulated that ‘local producers and major merchants, whether they are importers, agents or representatives have the right to generate the same profit rate set for wholesale trade.’ Some commodities such as fuel, bread and medicines were excluded from Decision 277 as the profits generated from their sale were to be determined by special decisions. Unfortunately though, Decision 277 was never taken seriously and a strategy of free prices prevailed instead.
On October 16, 2006, Decision 263 AD came out to repeal Decision 277 and lay down different rates, but Minister Mohammad Safadi issued Decision 193/1/A.T on October 26, 2010 reinstating Decision 277.
Article 6 of Legislative Decree no. 73 dated September 9, 1983 established that the Minister of Economy and Trade is eligible to determine the maximum fees charged in exchange for services and the maximum prices of goods, materials and crops as well as the cap of profit rates depending on the findings of the special committees he forms.
Article 7 of the said Decree also stipulated that the goods, materials and crops produced locally or imported, to which no maximum sale price or profit rate has been assigned, may not be sold at more than double the prime cost at best.
شاهد الجدول كاملا
شاهد الجدول كاملا
شاهد الجدول كاملا
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