Joint Committees Approve Article 5 of New Wage Scale as SCC Warns of Unprecedented Measures

The joint parliamentary committees approved on Monday the fifth article of the new wage scale, which tackles the taxes on construction licenses.

"We have approved Article 5 of the draft law, which is related to the fees of the construction licenses, and we discussed other articles,” Finance and Budget Parliamentary Committee chief MP Ibrahim Kanaan announced after the afternoon discussions.

He added: “We addressed parliamentary blocs with several questions about the VAT and other matters, and MPs will respond tomorrow after negotiating with their parties.”

Kanaan said the joint parliamentary committees will convene again on Tuesday at 10:30 in the morning, “to reach consensus over funding the new wage scale.”

“We have to work in a balanced manner to avoid taking a step into the unknown,” the Change and Reform bloc MP commented, denying that a negative atmosphere is prevailing in the meetings' discussion.

Meanwhile outside the parliament, members of the Syndicate Coordination Committee protested demanding that the new wage scale be referred to parliament this week, threatening to take “unprecedented escalatory measures” to reach their goal.

The SCC warned that it will take to the streets on Wednesday if the new wage scale is not referred to parliament.

Earlier in the day, the joint parliamentary committees met with Central Bank Governor Riad Salameh to get his feedback on the new wage scale, as the latter warned of its impact and called for dividing it up over five years.

"Salameh warned of the dangers of adopting a new wage scale on inflation, interests, and on the Global Credit Ratings,” the committees' MPs said after the meeting.

"Therefore, he called for dividing up the wage scale over a period of five years, to avoid issuing a large sum of money that is estimated at two billion dollars,” they added.

The governor noted that the dangers of the “enormous” new wage scale are related to the amounts of expected future revenues.

When the draft law's Article 1, which is related to the VAT, was tackled, some MPs suggested increasing it from 10 to 12 percent.

Meanwhile, other members of the committee proposed increasing taxes on luxury items up to 15 percent.

"The talks with Salameh were positive and promising... We will go forward with studying the draft law in order to put it on the parliament's agenda on Wednesday or Thursday.”

Kanaan had announced that the joint committees discussed seven out of nine articles of the draft law on Friday.

Former Prime Minister Najib Miqati's cabinet endorsed in 2012 a new salary scale for public employees ending a long dispute that had prompted the Syndicate Coordination Committee to hold several sit-ins and strikes.

President Michel Suleiman signed the decree mid-June 2013 and it was referred to the joint parliamentary committees for further scrutiny.

The wage increase will be retroactive from July 1, 2012.

The state treasury will have more than $1.2 billion to cover as there are over 180,000 public sector employees including military personnel.

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