The building that houses the Lebanese Banks Association in Beirut. (The Daily Star/Grace Kassab)
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The proposal to fund a public sector wage hike by increasing taxes on the interest earned on bank deposits will cost depositors LL280 billion ($186 million) and drive many to take their business elsewhere, the head of the Association of Banks in Lebanon said Thursday.Bassil also criticized a proposal to increase taxes on bank dividends and tax some of the assets deposited by commercial banks at the Central Bank.A statement by ABL cautioned that banks could be compelled to increase interest rates on housing and personal loans to make up for the decision to raise taxes on interest on deposits and banks' dividends.Some banks fear that international rating agencies such as Moody's would not hesitate to downgrade the banks even further if the tax measures and salary scale were adopted.
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