Lebanon passes disputed tax hikes to fund public sector pay rise

Lebanon’s Prime Minister Saad Al-Hariri gestures during a press conference in Parliament building in Beirut on Tuesday, (Reuters)
Updated 10 October 2017
Follow

Lebanon passes disputed tax hikes to fund public sector pay rise

BEIRUT: Lebanon’s Parliament approved contentious taxes needed to finance a public sector pay rise on Monday and Prime Minister Saad Al-Hariri warned the alternative was a collapse of the Lebanese pound in six months.
“Without taxes it would have been better in popular terms, but six months later the lira would have collapsed,” Al-Hariri said after the parliament session.
“If we carried out the (public sector salary law) without revenues it would be a disaster for the country.”
Lebanon has a debt-to-GDP (gross domestic product) ratio of 148 percent, one of the highest in the world, and recorded a fiscal deficit of $4.9 billion last year.
Parliament approved a $917 million rise in public sector salaries and a series of tax increases to fund it in July.
Despite objections from business and some political groups, President Michel Aoun ratified the laws in late August and people have since begun receiving increased salaries.
But in September the constitutional council annulled the tax law after a political party brought a legal challenge and the council referred it back to parliament for amendments.
A Lebanese official told Reuters the taxes approved on Monday remained “mostly as they were before being challenged in the Constitutional Council and do not contain any substantive amendments.”
A key argument of those opposing increased taxes is that the Lebanese government offers little in return.
The country’s infrastructure has been awaiting repair since the 15-year civil war ended in 1990 — roads are clogged with cars, beaches are littered with waste, Internet links are slow or patchy and cuts to power and water supplies are frequent.
Sami Gemeyal, leader of the Christian Kataeb party which filed an appeal against the earlier version of the law, said it would do all it could to challenge it again.
“We will study it and see if it is possible to contest the law at the constitutional council,” said Gemeyal. Kataeb is the only major political party not part of Lebanon’s coalition government.
Lebanon expects to hold a general election next year and the public sector pay rises have proved a popular move.
But the business community has warned higher taxes could damage Lebanon’s fragile economy, which has been battered by conflict in neighboring Syria. Growth fell from 8-9 percent to below 2 percent after war began in 2011.
Business leaders say Lebanon instead needs better tax collection, a credible economic plan and a budget to be passed for the first time since 2005.
The banking sector, the cornerstone of Lebanon’s economy, objected strongly to the law.
The changes raised corporation tax to 17 percent from 15 percent and also applies taxes on bank transactions in a way bankers say amounts to double taxation.
The effective tax rate on banks currently stands at around 15 percent, but would rise to around 50 percent if the proposed tax changes are enacted, said Freddie Baz, Group Strategy Director of Bank Audi and board member of the Association of Banks in Lebanon (ABL) lobby group.
The laws have provoked a number of street protests, with people asking for pay rises and also protesting hikes which raised value-added tax (VAT) by 1 percentage point to 11 percent.
The head of Lebanon’s General Labour Union Beshara Al-Asmar said before the vote on Monday there would be a “complete strike” which would ground the country to a halt if positive results were not achieved.


Palestinian citizens in Israel demand more security from violence

Updated 58 min 11 sec ago
Follow

Palestinian citizens in Israel demand more security from violence

  • Protests and strikes are sweeping Israel over record levels of violence targeting the country’s Palestinian citizens
  • At least 26 people were killed in January alone, adding to a record-breaking toll of more than 250 last year

KAFR YASIF, Israel: Nabil Safiya had taken a break from studying for a biology exam to meet a cousin at a pizza parlor when a gunman on a motorcycle rode past and fired, killing the 15-year-old as he sat in a black Renault.
The shooting — which police later said was a case of mistaken identity — stunned his hometown of Kafr Yasif, long besieged, like many Palestinian towns in Israel, by a wave of gang violence and family feuds.
“There is no set time for the gunfire anymore,” said Nabil’s father, Ashraf Safiya. “They can kill you in school, they can kill you in the street, they can kill you in the football stadium.”
The violence plaguing Israel’s Arab minority has become an inescapable part of daily life. Activists have long accused authorities of failing to address the issue and say that sense has deepened under Israel’s current far-right government.
One out of every five citizens in Israel is Palestinian. The rate of crime-related killings among them is more than 22 times higher than that for Jewish Israelis, while arrest and indictment rates for those crimes are far lower. Critics cite the disparities as evidence of entrenched discrimination and neglect.
A growing number of demonstrations are sweeping Israel. Thousands marched in Tel Aviv late Saturday to demand action, while Arab communities have gone on strike, closing shops and schools.
In November, after Nabil was gunned down, residents marched through the streets, students boycotted their classes and the Safiya family turned their home into a shrine with pictures and posters of Nabil.
The outrage had as much to do with what happened as with how often it keeps happening.
“There’s a law for the Jewish society and a different law for Palestinian society,” Ghassan Munayyer, a political activist from Lod, a mixed city with a large Palestinian population, said at a recent protest.
An epidemic of violence
Some Palestinian citizens have reached the highest echelons of business and politics in Israel. Yet many feel forsaken by authorities, with their communities marked by underinvestment and high unemployment that fuels frustration and distrust toward the state.
Nabil was one of a record 252 Palestinian citizens to be killed in Israel last year, according to data from Abraham Initiatives, an Israeli nongovernmental organization that promotes coexistence and safer communities. The toll continues to climb, with at least 26 additional crime-related killings in January.
Walid Haddad, a criminologist who teaches at Ono Academic College and who previously worked in Israel’s national security ministry, said that organized crime thrives off weapons trafficking and loan‑sharking in places where people lack access to credit. Gangs also extort residents and business owners for “protection,” he said.
Based on interviews with gang members in prisons and courts, he said they can earn anywhere from thousands to hundreds of thousands of dollars, depending on whether the job is torching cars, shooting at buildings or assassinating rival leaders.
“If they fire at homes or people once or twice a month, they can buy cars, go on trips. It’s easy money,” Haddad said, noting a widespread sense of impunity.
The violence has stifled the rhythm of life in many Palestinian communities. In Kafr Yasif, a northern Israel town of 10,000, streets empty by nightfall, and it’s not uncommon for those trying to sleep to hear gunshots ringing through their neighborhoods.
Prosecutions lag
Last year, only 8 percent of killings of Palestinian citizens led to charges filed against suspects, compared with 55 percent in Jewish communities, according to Abraham Initiatives.
Lama Yassin, the Abraham Initiatives’ director of shared cities and regions, said strained relations with police long discouraged Palestinian citizens from calling for new police stations or more police officers in their communities.
Not anymore.
“In recent years, because people are so depressed and feel like they’re not able to practice day-to-day life ... Arabs are saying, ‘Do whatever it takes, even if it means more police in our towns,’” Yassin said.
The killings have become a rallying cry for Palestinian-led political parties after successive governments pledged to curb the bloodshed with little results. Politicians and activists see the spate of violence as a reflection of selective enforcement and police apathy.
“We’ve been talking about this for 10 years,” said Knesset member Aida Touma-Suleiman.
She labeled policing in Palestinian communities “collective punishment,” noting that when Jews are victims of violence, police often set up roadblocks in neighboring Palestinian towns, flood areas with officers and arrest suspects en masse.
“The only side that can be able to smash a mafia is the state and the state is doing nothing except letting (organized crime) understand that they are free to do whatever they want,” Touma-Suleiman said.
Many communities feel impunity has gotten worse, she added, under National Security Minister Itamar Ben-Gvir, who with authority over the police has launched aggressive and visible campaigns against other crimes, targeting protests and pushing for tougher operations in east Jerusalem and the occupied West Bank.
Israeli police reject allegations of skewed priorities, saying that killings in these communities are a top priority. Police also have said investigations are challenging because witnesses don’t always cooperate.
“Investigative decisions are guided by evidence, operational considerations, and due process, not by indifference or lack of prioritization,” police said in a statement.
Unanswered demands
In Kafr Yasif, Ashraf Safiya vowed his son wouldn’t become just another statistic.
He had just gotten home from his work as a dentist and off the phone with Nabil when he learned about the shooting. He raced to the scene to find the car window shattered as Nabil was being rushed to the hospital. Doctors there pronounced him dead.
“The idea was that the blood of this boy would not be wasted,” Safiya said of protests he helped organize. “If people stop caring about these cases, we’re going to just have another case and another case.”
Authorities said last month they were preparing to file an indictment against a 23-year-old arrested in a neighboring town in connection with the shooting. They said the intended target was a relative, referring to the cousin with Nabil that night.
And they described Nabil as a victim of what they called “blood feuds within Arab society.”
At a late January demonstration in Kafr Yasif, marchers carried portraits of Nabil and Nidal Mosaedah, another local boy killed in the violence. Police broke up the protest, saying it lasted longer than authorized, and arrested its leaders, including the former head of the town council.
The show of force, residents said, may have quashed one protest, but did nothing to halt the killings.