Business heads slam public salary boost

Kanaan says government will consult
stakeholders before adopting new taxes

The salary raise for the public sector will have devastating effects on the financial and monetary situations, private sector economic bodies warned.

“The government is culpable for adopting an arbitrary (salary scale) law,” business leaders said following their urgent meeting on Thursday (September 13). They reiterated their rejection to any tax increase, namely that on bank deposits.

The Cabinet said earlier it will finance the raise through new taxes, among which a higher tax on interests on bank deposits, and increasing the tax on profits from real estate improvement.

MP Ibrahim Kanaan, director of the Parliament’s Finance and Budget commission said the Cabinet is still considering tax procedures to finance the raise. “Nothing is final so far,” he said.
Kanaan said introducing any new taxes will be well-studied beforehand: “No tax proposal will be enforced. Before any tax law is adopted the government will hold in-depth talks with all stakeholders.”

Increasing the salaries of civil servants will cost the Treasury an extra $1.1 billion per year, in addition to the $3 billion spent on salaries and benefits each year.