Lebanese banks strike in protest over deposit tax hike plan

Parliament is discussing an increase in public sector wages in response to more than two years of union strikes and protests
Lebanese banks strike in protest over deposit tax hike plan
Lebanese parliament speaker Nabih Berr. (Getty Images)
By Reuters
Sun 13 Apr 2014 11:34 AM

Workers at Lebanese banks held a one-day strike at the weekend in protest at a proposal by lawmakers to tax interest earned on deposits more heavily to help fund public wages rises.

Lebanon's parliament is discussing an increase in public sector wages in response to more than two years of union strikes and protests.

But deputies say they need to collect additional revenues to fund the increases so as not to widen the state deficit.

One proposal from a parliamentary committee is to raise the tax on interest on deposits to seven percent from five percent.

The Association of Banks in Lebanon said this would have a "negative impact on the stability of the Lebanese pound and citizens' purchasing power".

Lebanon is one of the most indebted countries in the world and banks hold most of the public debt.

The three-year civil war in neighbouring Syria has contributed to the sharp slowdown in economic growth, and the World Bank says Lebanon is losing $900 million a year as a direct result of the crisis.

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