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Businesses: Proposed taxes a bullet in heart of economy

File - President of the Chamber of Commerce Mohammad Choucair speaks during an interview with The Daily Star in Beirut, Tuesday, Jan. 28, 2014. (The Daily Star/Mohammad Azakir)

BEIRUT: Business leaders Thursday strongly rejected any new taxes to fund the proposed wage hike for government employees, describing the salary scale in its present form as a bullet in the heart of the economy.

“These haphazard decisions were taken for political reasons. These taxes will scare away investors and fire the mercy bullet in the heart of the economy,” a statement by the Economic Committees, a grouping of leading businessmen in Lebanon, said after the emergency meeting.

The group suggested that politicians had adopted these hasty decisions to muster support from the public ahead of the next parliamentary elections.

Mohamed Choucair, the president of the Beirut Chambers of Commerce and Industry, told The Daily Star that politicians were steering the country to the ravine.

“These politicians don’t know what they are doing. If we increase the salaries for the public employees and public school teachers than the wages for them will represent 44 percent of the total government revenues, and this is insane. If you look at most countries, the salaries of government employees do not exceed 15 to 20 percent of total state revenues,” Choucair argued.

He added that Greece, Spain and other countries had adopted tough austerity measures and even reduced the wages of the public employees to tackle the recession and high budget deficits.

“We already have a negative growth and poor trade activity. Now the economy will slide even further and I am sure the rating agencies will further downgrade Lebanon,” Choucair said.

Choucair insisted that not all of the teachers and government employees deserve a pay raise:

“Nearly half of the 28,000 public school teachers are redundant. Why should the tax payers fund people who do not report to work?”

Choucair and the Economic Committees’ members doubt that the government will be able to raise the targeted tax revenues.

“They [politicians] are dreaming. There is no way to fund the salary scale from the proposed taxes. The country can’t handle more taxes,” Choucair said.

The committees cautioned that the wage hike would be ineffective.

“Inflation and high prices of commodities will eat up all the incomes of the workers and teachers. The sufferings of the classes will even multiply if the Parliament proceeds with the proposed salary scale,” the group argued.

The group repeated that the best way to fund the salary scale was to cut waste in government departments.

 
A version of this article appeared in the print edition of The Daily Star on April 11, 2014, on page 5.

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Summary

Business leaders Thursday strongly rejected any new taxes to fund the proposed wage hike for government employees, describing the salary scale in its present form as a bullet in the heart of the economy.

If you look at most countries, the salaries of government employees do not exceed 15 to 20 percent of total state revenues," Choucair argued.

He added that Greece, Spain and other countries had adopted tough austerity measures and even reduced the wages of the public employees to tackle the recession and high budget deficits.

Choucair insisted that not all of the teachers and government employees deserve a pay raise:

Choucair and the Economic Committees' members doubt that the government will be able to raise the targeted tax revenues.

The group repeated that the best way to fund the salary scale was to cut waste in government departments.


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