Production and consumption tax stirs economic confusion… conflicting statements and incomplete decisions raise questions among Libyans.

February 2, 2026
libyawire
Economy
0

The tax situation in Libya is witnessing a clear state of confusion and contradictory statements, amid the absence of a decisive official statement clarifying the truth about the production and consumption tax, and whether it has actually been adopted or not.

🟣 A New Tax Law… or Just a Proposal?

Media outlets circulated information in recent days indicating that the House of Representatives is moving to issue a new law regulating the “production and consumption tax” to compensate for the deficit resulting from the abolition of foreign currency fees.
However, a number of members of the council quickly issued an official statement confirming that no tax has been imposed yet, and that what is being circulated is nothing more than a proposal under discussion.

This contradiction has created a state of confusion for both citizens and the commercial sector.

🟣 The Central Bank and the Ministry of Economy… Announcement of a 5% Reduction Without Clarifying the Origin of the Tax

In a new development, it was reported that the Central Bank of Libya and the Ministry of Economy have reached an agreement to reduce the consumption and exchange tax by 5% starting next April, with the reduction continuing gradually.

But this announcement raised a logical question among citizens:
If the tax has not been approved in the first place, how can its reduction be announced?

So far, no official body has provided a clear explanation regarding:

What is the intended tax?
What is its base rate?
Has it been adopted or not?
Which authority is authorized to approve it?

🟣 Source at the Ministry of Economy: 5% Reduction… Without Details

A source at the Ministry of Economy confirmed the existence of an agreement to reduce the consumption and exchange tax by 5% starting in April, but did not provide any details regarding:

The original value of the tax
The mechanism for its application
The goods or services it covers
The body that approved it

This made the statement seem vague and incomplete, increasing the state of ambiguity rather than clarifying it.

🟣 Citizens Demand Clear Answers

With conflicting statements between: the House of Representatives, the Central Bank of Libya, the Ministry of Economy, and the media.

Citizens’ demands have risen for the necessity of issuing a unified official statement clarifying:

Is there a new tax or not?
What is its rate?
When does its application begin?
And what is its relation to the abolition of foreign currency fees?

The current scene reflects an absence of institutional coordination, leaving the market in a state of anticipation and anxiety, especially given the sensitivity of the exchange rate file and its direct impact on prices and the cost of living.

Libya

Libya is a North African country with a rich history rooted in ancient civilizations like the Phoenicians and Romans, followed by centuries of Arab and Ottoman influence. In the modern era, it was an Italian colony before gaining independence in 1951, later becoming known for Muammar Gaddafi’s lengthy rule from 1969 until the 2011 revolution. Its cultural sites include the well-preserved Roman ruins of Leptis Magna, a UNESCO World Heritage site.

House of Representatives

The House of Representatives is the lower chamber of the United States Congress, established by the Constitution in 1789. It is composed of representatives elected from congressional districts, with representation based on state population, and holds primary responsibility for initiating revenue bills and impeaching federal officials.

Central Bank of Libya

The Central Bank of Libya is the country’s primary monetary authority, established in 1956 to issue currency and manage monetary policy. It has played a critical and often divisive role in Libya’s recent history, notably functioning as a unified financial institution during the post-2011 civil war period despite the country’s political fragmentation.

Ministry of Economy

The Ministry of Economy is a government department responsible for formulating and implementing national economic policy. Its history is tied to the development of the modern state, often evolving from earlier finance or trade ministries to address broader economic planning, industry, commerce, and international trade.