Cabinet passes additional light taxes to finance salary scale

Ministerial Council. Tuesday, September 18, 2012. (The Daily Star/Dalati Nohra/HO)

BEIRUT: The Cabinet approved Tuesday new packages of taxes in another move to fund the controversial salary hike amid indications that the debate on this issue would drag on for some time.

Among the decisions reached by the ministers was slapping a LL1,000 tax on every land line and cellular bill, raising tax on the profits netted by lottery winners from 10 percent to 15 percent and fines on illegal properties that were built along the coast during the Civil War.

Information Minister Walid Daouk told reporters after the Cabinet session ended that the ministers had asked Finance Minister Mohammad Safadi to prepare draft laws on the taxes that had been agreed upon.

Daouk added that discussions focused on the salary scale and the 2013 draft budget, adding that the ministers gave their views on all the topics that were raised.

However, the minister declined to give further details on other sources of funding for the salary scale.

He added that Wednesday’s Cabinet meeting would concentrate on administrative appointments.

Some news media reported that only 11 ministers rejected an increase on the salaries of ministers and lawmakerswhile the remaining 19 insisted that they were entitled to the increments just like any employee in government departments.

But these taxes which were approved by the Cabinet may not be enough to finance even a small portion of the salary scale which will cost the treasury more than $1 billion a year.

Safadi, according to sources, would face an uphill task in persuading ministers to approve the taxes which he submitted in the 2013 draft budgets.

Among his proposals was raising the value added tax from 10 to 12 percent and raising tax on deposit interest.

But all these proposals were turned down by most of the ministers, who argued that the taxes should not cause panic among the poor and middle class or even banks.

Other ministers called on Prime Minister Najib Mikati and Safadi to combat corruption and waste as well as improve tax collection, noting that one-third of the registered taxpayers are tax evaders.

Leading businesspersons claim that the government can save as much as $1 billion a year if it ended waste in public departments.

They also blast the successive governments for failing to address the electricity crisis, which is costing the treasury around $2 billion a year.

It remains to be seen whether Parliament will accept the salary scale.

A source told The Daily Star that the Cabinet is expected to approve many appointments in key positions in public offices.

He added that the appointments would include key positions which had been the subject of debate among the ministers.

The source said that the Cabinet was not expected to name the Petroleum Administration’s six-member board, which is very crucial to launching oil and gas exploration off the Lebanese coast.

A version of this article appeared in the print edition of The Daily Star on September 19, 2012, on page 5.




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