Economic bodies continue struggle against salary scale

Draft law to raise public sector
salaries by up to 60 percent

Economic bodies will continue their struggle against the salary scale draft law for public sector employees, according to Nicolas Chammas, president of the Beirut Traders Association (BTA).

Representatives of private sector businesses have been shuttling between political leaders for the past week, with talks focused on the “drastic” impact the new salary scale draft law will have on the economy.

“All political parties have become aware of the threat posed by the adoption of the salary scale,” Chammas said.

The Cabinet had agreed to finance the salary scale through more taxes. According to Chammas, the Cabinet is now “afraid to back out from its decision of adopting the new salary scale.”

The new salary scale, which offers civil servants another salary rise, will not be applied unless approved by Parliament. The new scale would raise the wages of top level 'grade one' civil servants, from $3,400 to $5,900, and those of the lowest level 'grade one' civil servants' salaries will go up from $2,000 to $2,800. Wages of top level 'grade two' civil servants will rise from $1,900 to $4,000.

The 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.

The salary scale is expected to raise the wages of public sector workers by around 60 percent. Its cost is estimated at $1.1 billion.

The Ministry of Finance prepared a set of tax proposals, including raising the value-added tax to 12 percent, increasing fees on the exploitation of coastal properties, increasing the tax on interest paid on bank deposits, and a number of new fees on real estate. These taxes, which were also included in the 2013 draft budget, raise the total annual tax revenues by some $2 billion, around 30 percent more than the total tax revenues collected in 2011.