The Central Bank of Libya refused to disburse grants to students studying abroad, demanding that the Ministry of Finance in Dbeibeh’s government authorize the deduction of the grants’ value and the imposed fee according to the prevailing exchange rate and fee. The Central Bank justified this by the issuance of disbursement authorizations after the Speaker of the House of Representatives, Aguila Saleh, issued a decision imposing a “27%” fee on foreign currency sales, without exempting any public or private entity.
In response to the Central Bank’s refusal, Prime Minister Abdul Hamid Dbeibeh reiterated his rejection of Aguila Saleh’s decision to impose fees on foreign currency sales and his non-recognition of this measure. On Wednesday, Dbeibeh stated in a letter to Sadiq Al-Kabir that he would instruct the Ministry of Finance to take action if the Central Bank agreed to adopt the new financial procedures resulting from the activation of the tax, explaining that this measure would entail additional financial arrangements.
Budget Implications
In a related development, the Ministers of Finance, Khaled Al-Mabrouk, and Planning, Acting Minister Mohammed Al-Zaydani, met with the committee formed by the Prime Minister to study the impact of the “27%” tax imposition, due to the lack of exemption for government entities from the decision. The two ministries presented a technical position on the financial impact on the budget sections, according to government spending for the year 2024. The committee decided to submit its report to the Prime Minister on the additional financial burdens to issue the necessary decisions to control the budget.
Unilateral Decision
On March 15th, Aguila Saleh, the Speaker of Parliament, issued decision No. 15 of 2024, imposing a tax on the official exchange rate of foreign currencies at 27% for all purposes until the end of 2024, without consulting the relevant political components. The Central Bank of Libya instructed banks to implement the decision.
Judicial Ruling
At the end of April, the South Tripoli Court of Appeal temporarily suspended the implementation of Aguila Saleh’s decision to impose a 27% tax on the official exchange rate of foreign currencies until the matter is resolved, based on an administrative appeal submitted by Dbeibeh. The court accepted the appeal in form and, in the urgent aspect, temporarily suspended the challenged decision until the matter is resolved, and referred the appeal documents for preparation and postponed the ruling on costs until the matter is resolved.
Another Ruling
Within 24 hours, another ruling was issued, with the Misrata Court of Appeal temporarily suspending the implementation of the decision, based on an appeal submitted by the Chairman of the Misrata Chamber of Commerce, Industry, and Agriculture, Fathi Al-Turki, and a group of companies affiliated with the chamber.
Political Dispute
The dispute over the tax between Dbeibeh, Aguila Saleh, and Al-Kabir is a new chapter in the ongoing political maneuvers and interest alignments. Dbeibeh had previously stated that the decision was made unilaterally, noting that Libya’s economic situation is good and does not require any exceptional measures. Previously, Central Bank Governor Sadiq Al-Kabir expressed his dissatisfaction with the increased government spending by the Government of National Unity, which reached 420 billion dinars over the past three years.