$1 billion offer to
avert tax hike rejected

François Bassil denies

proposal was made to the State

Banks have offered to pay the State $1 billion if it does not increase the tax on the interest earned from deposits, according to Minister of Finance Ali Hassan Khalil.

“The proposal was turned down by the Ministry of Finance (MoF),” he said.

François Bassil, former chairman of the Association of Banks and current Group Chairman of Byblos Bank, denied that such an offer was made to the State.

The current tax on the interest earned from bank deposits is five percent. It is paid by account holders, and not by banks. The proposed increase to seven percent will not be deductible from the tax imposed on banks’ profits.

The attempt to increase public sector salaries in 2014 had been aborted by opposition to tax on interest, according to Khalil.

“Contesting the imposition of new taxes on banks and real estate and financial companies would thwart again the planned salary hike,” he said.

The additional tax revenues from banks, real estate, and financial companies would reach nearly LL1,000 billion liras ($664 million), covering most of the proposed public sector salary increase, he said.