Business heads to meet with economy committee

Chammas says "no discussion of new taxes"

Parliament's economy committee and representatives of private sector businesses will hold talks over the new salary scale for civil servants on Tuesday.

"The meeting will adress the impact of adopting new taxes to finance the salary scale on the economy," said MP Nabil De Freij, president of the National Economy commission.

Business leaders are against the salary rise for public sector employees, which will be financed through more taxes. “We will not go through the taxes, and we reiterate our rejection of the new salary scale,” said Nicolas Chammas, president of the Beirut Traders Association (BTA).

The Ministry of Finance has already prepared draft laws for a set of new taxes, including raising the value-added tax to 12 percent, increasing fees on the exploitation of coastal properties, increasing the tax on interest paid on banks deposits, and a number of new fees on real estate.

The new salary scale, approved by Cabinet, offers civil servants raises each according to their grade. If approved by the Parliament’s general assembly, the salary rise will apply with retroactive effect from July 2012. The salary increase will cost the Treasury $1.1 billion a year. They will be paid in installments over two years, starting April.

Public sector employees are also set to receive the wage raise which the government adopted in January. This rise, which is meant to cover cost of living inflation in, will be paid starting from the end of this month (September), with retroactive effect from February.

The cost of living increase and the new civil service salary scale will benefit some 220,000 public sector employees in the military, the security forces, and in administration, as well as other state employees and public school teachers.