Business heads oppose $2.5 billion salary rise

Cabinet asks Safadi to draft laws for new taxes

Amending the salary scale for civil servants will cost the treasury $2.5 billion, according to a study prepared by the gathering of economic associations.

The Ministry of Finance said the pay rise would cost the Treasury an extra $1.1 billion each year, in addition to the $3 billion it already spends on public sector salaries and benefits.

“The (new) salary scale will increase the treasury's deficit to $6.5 billion,” said Mohammad Choucair, president of the Chamber of Commerce, Industry, and Agriculture of Beirut and Mount Lebanon (CCIABML).

Business leaders are against the salary rise for public sector employees, which will be financed through more taxes.

The Cabinet on Tuesday asked Minister of Finance, Mohamad Safadi, to prepare draft laws for each of the new tax proposals. The draft laws will be presented to Cabinet for approval before being submitted to Parliament. The proposals include increasing the value-added tax from ten to 12 percent, raising the fees on the exploitation of coastal properties, and a number of new taxes on real estate.

"Before any tax law is adopted the government will hold in-depth talks with all stakeholders, including economic associations,” said MP Ibrahim Kanaan, president of Parliament’s Finance and Budget Committee.