O Bankers of Lebanon, Set the Tires Ablaze!
The state uses public funds to support the banking sector, yet the banks expect us to lend a sympathetic ear to them. The state subsidizes private education through scholarships exceeding USD 200 million annually, so that public school teachers can enroll their children in private schools. Our state administrative apparatus has become devoid of staff for the majority of civil servants are contracted on a daily basis or serving by proxy. Public institutions such as the Banque du Liban, Casino du Liban, the Port of Beirut, Middle East Airlines and the National Social Security Fund pay fat cat salaries to their employees, yet their budgets remain outside the state budget. Railway workers are without a train, refinery workers without oil and silk workers without cocoons. As for our intelligentsia- university professors, authors and thinkers- they lament the loss of values and the decay of the state while they solicit the Zua’ama for a title or a position. And the list could go on endlessly.
Addressing all these issues requires time, but unfortunately, both the people and their representatives in Parliament were apparently a little tied up with other engagements. Let the solution then be by urging a slew of rapid new laws and resolutions upon which solutions might be built.
First: approving the pay scales as proposed, which would mean adding an extra USD 2 billion annually to public expenditure.
Second: increasing taxes on bank deposits interest, which according to the 2013 statistics, stand at roughly USD 600 million, by raising the rate of interest paid on bank accounts over USD 500,000 from 5% to 10%, thus increasing the revenue earned from taxation on bank account interest from USD 600 million to USD 1200 million. If the banks were to complain about the new taxation introduced on treasury bond interest, it would be worthwhile noting that a decrease as modest as 1% (from 6.5% to 5.5% on average) in the interest rates that these banks earn from treasury bonds could save the treasury approximately USD 600 million.
Third: pushing up electricity tariffs and improving the collection of bills. Instead of the current bracket-based billing system, the cost of electricity consumption below 500 KWh should stand at LBP 100 per KWh, thus raising the bill to LBP 50,000 rather than LBP 35,000 while LBP 300 should be charged per KWh when the consumption exceeds 500KWh. The consumer’s bill would thus jump from the current LBP 135,000 to LBP 185,000 for every 1000 KWh.
Enforcing a stricter collection system and reducing waste could also contribute towards decreasing the power deficit by more than USD 600 billion annually.
Hence, commoners and capitalists would both exercise their shared responsibility toward the state.
Fourth: restructuring the taxation system is a must. Fining those who encroach on public property is also a must as well as taxing real estate profits although it may need time and may be difficult to control if we fail both to stop the waste and to cleanse the offices of the land registry and the customs.
Most ironic are 1) the parents who object to the revised teachers’ salaries to spare themselves additional tuition fees without ever questioning the reasons that lead to the alarming decline in free public education, 2) the teachers who demand higher pay without bothering to conduct self criticism and reflect on their shortcomings and 3) business tycoons who threaten to strike despite their violation of the NSSF laws while blaming employees if they strike.
Let us not forget that the net profits of the banking sector, after deduction of tax, soared to roughly USD 8 billion in 6 years (2007-2012), while the taxation levied stood at roughly USD 1.5 billion. Paradoxically, the banks had the audacity to challenge additional taxes under the pretext of protecting the Lebanese citizen.
Banks on strike!? Have higher taxes levied on their gains and let bankers set tires ablaze if they so wish? Let bankers and daily wage workers become partners in destiny!
Has anyone taken notice that the sectarian rhetoric is currently off the table!? No segregated Sunni, Shia’a and Christians now. All of them, from both the March 8 and March 14 camps, are now united for and by the lira.
What system is it which they speak to us of?
Jawad N. Adra
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