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MPs reduce salary scale funding to $1.2B

Parliament is unlikely to approve higher wages for civil servants in the foreseeable future.

BEIRUT: A parliamentary committee seeking ways to solve the controversial salary scale issue has reduced the total funding from LL2.8 trillion ($1.9 billion) to LL1.8 trillion ($1.2 billion), and is still struggling to put final touches on proposed taxes, a lawmaker has told The Daily Star.

According to the MP, the committee has accepted raising the value added tax from 10 to 11 percent and customs by one percent, adding that both increases should generate revenue of LL623 billion a year.

“There was one idea to apply 15 percent VAT on luxury items but this tax will not bring sufficient funds for the treasury,” the MP explained.

Meanwhile, a member of the committee said: “We tentatively agreed to set the amount of funding of the higher wages at LL1.85 trillion instead of LL2.8 trillion. But we are still reviewing some of the taxes needed to fund the salary scale.”

The committee, which is expected to submit the finalized study next week, has also approved a series of measures and reforms.

Economist Ghazi Wazni also told The Daily Star that the committee agreed to pay the salary increase in one shot and not in installments, as suggested earlier.

“The committee also agreed to increase the working hours of civil servants, apply taxes on pensioners and cut waste in public departments,” he said.

Among the proposals studied by the committee was raising taxes on banks’ profits from the current level of 15 percent to 17 percent.

The committee has apparently dropped the proposal to raise taxes on interest of the banks’ investments in government bonds because this was considered double taxation.

But Wazni believes that the committee may not be able to persuade the Parliament to pass these proposals for the time being.

“MPs Ibrahim Kanaan and Yassin Jaber, who belong to March 8, have not attended the committee’s meeting and this could create a problem,” he added.

Hanna Ghrayeb, leader of the Union Coordination Committee, said the UCC refused to compromise on the demands made by teachers and civil servants.

“We are going to call for more strikes and demonstrations next week to increase the pressure on the Parliament and MPs. We will not yield until all our demands have been met,” he told The Daily Star.

“All of the parliamentary blocs have refused the salary scale and tried to either kill the bill or pay the wages in installments,” Ghrayeb added.

He accused officials of conspiring against public education in Lebanon.

“This battle goes beyond the salary scale. They [officials] want to swarm public schools and vocational centers with thousands of contractual teachers instead of making them undergo entrance exams. This policy is aimed at undermining the elementary public schools and convincing the Lebanese that government schools are not capable of providing proper education for the students.”

“Why did the previous government give the judges and Lebanese University professors a 121 percent wage increase? We need equal treatment or we will escalate the situation,” Ghrayeb said.

Ghrayeb also noted that the starting salary of a Lebanese University professor is LL3,500,000 ($2,200) while the starting salary of a public school teacher is only LL1,000,000.

“Most of the public school teachers have MA degrees but the money they are making is trivial. Should we all earn PhDs so we can earn a bigger salary? This is really nonsense,” he said.

 
A version of this article appeared in the print edition of The Daily Star on May 05, 2014, on page 5.

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Summary

A parliamentary committee seeking ways to solve the controversial salary scale issue has reduced the total funding from LL2.8 trillion ($1.9 billion) to LL1.8 trillion ($1.2 billion), and is still struggling to put final touches on proposed taxes, a lawmaker has told The Daily Star.

According to the MP, the committee has accepted raising the value added tax from 10 to 11 percent and customs by one percent, adding that both increases should generate revenue of LL623 billion a year.

Among the proposals studied by the committee was raising taxes on banks' profits from the current level of 15 percent to 17 percent.

Ghrayeb also noted that the starting salary of a Lebanese University professor is LL3,500,000 ($2,200) while the starting salary of a public school teacher is only LL1,000,000 .


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