The Constitutional Chamber of Libya’s Supreme Court has ruled that Law No. 44 of 1970, which introduced the controversial Jihad Tax, is unconstitutional.
This decision effectively abolishes the long-standing 3% salary deduction imposed on employees earning above 100 Libyan dinars.
End of a 54-Year-Old Tax Burden
The Jihad Tax, first introduced in 1970, was designed to fund the Libyan Jihad Fund. Under Law No. 59 of 1972, these deductions were allocated to support “the Jihad of the Islamic world against colonial powers.”
With the Supreme Court’s ruling, deductions under this tax will immediately cease, offering relief to thousands of Libyan employees who have been subject to this levy for over five decades.
class="wp-block-heading">Implications for Libyan Workers and the Economy
The removal of the tax means that affected workers will now see a 3% increase in their take-home pay. This could provide a slight boost to household incomes and consumer spending, injecting more liquidity into Libya’s fragile economy.
While the ruling marks a significant shift in Libya’s tax policies, questions remain about how the government will compensate for the loss of revenue previously collected through the Jihad Tax.
Legal and Political Reactions
Legal experts have hailed the court’s decision as a victory for constitutional rights, arguing that the Jihad Tax had long outlived its purpose.
Political analysts, however, suggest that the ruling could have broader implications for Libya’s taxation framework, potentially prompting a review of other outdated fiscal policies.
As Libya navigates its evolving legal and economic landscape, the Supreme Court’s decision signals a move towards modernizing the nation’s tax laws and ensuring compliance with constitutional principles.
