Rage and Complaint Over ‘Dollar’ Payroll Taxes

Source: News from the sky

writerIkram Saab

The new fiscal measures foreseen in the 2022 budget in Lebanon, which have mainly affected private sector employees, employers and economic entities, have attracted anger and great condemnation, especially as they have affected wages received in whole or in part in US dollars.

Starting this December, these tax measures will go into effect for everyone who earns their salary in dollars, retroactively to early January 2022.

The move angered employees, who began preparing for the refusal moves, especially as one of the budget items provided for “the collection of income tax on companies that pay their employees’ salaries in hard currency, at rates high rates reaching 25 percent of salary in dollars.”

Absolutely not

As part of the anti-tax moves, private sector employees in Lebanon in more than one camp have moved towards submitting a legal review to the State Shura Council, in order to undo the damage suffered as a result of the new tax on income.

A few days ago some sectors announced a strike “unless the tax brackets are changed”. Among these sectors, the Air Transport Association, which has warned against the interruption of work at the airport.

Does the airport stop?

The head of the Federation of Air Transport Unions, Ali Mohsen, confirmed in an interview with “Sky News Arabia” that “what is needed is the imposition of a just and unfair tax”.

Mohsen revealed that “the strike at the airport and all the movements have been postponed during the holiday period, for fear of a negative impact on the tourist movement and on the return of the Lebanese during this period”.

And he added: “A few days ago we met with the finance minister in the interim government, Youssef Khalil, and we noticed that the picture for him is still blurry and unclear, especially as regards the division of salaries and the tax rate that it concerns them, and on what price for the dollar it meets, and it is on the official price of the dollar or according to the price of the black market!”.

He explained that “it has been agreed with the minister to freeze the project for the moment, to complete the negotiations”.

He continued: “Air Transport Association employees have struggled since the beginning of the crisis to adjust their salaries. Today they receive no more than 50 percent of what they received before the crisis.”

Mohsen also indicated that “this tax, if applied, will affect a group of companies that give their employees dollar salaries, partially or completely, as well as correspondents and employees of Arab and foreign agencies working on Lebanese soil, including employees of the Compagnie Middle East Air Force”.

The actions shock journalists

On the other hand, one of the media professionals working for an Arab news channel reported the incident and told Sky News Arabia: “We were paying half of the salary we received in US dollars, up to a ceiling of 225 million Lebanese pounds a year, or about $55, but in the budget law The new Ministry of Finance amended these sections and increased them by 3 times.

The journalist, who refused to reveal his name, added: “Among the measures was the increase in the price of the dollar calculated to collect the tax 20 times (i.e. the price of the dollar was calculated at 30,000 Lebanese pounds instead of £1,500 before the crisis), which has suffered a very large loss to employees who receive their wages in dollars, especially those who declare their income clearly and legally to the Ministry of Finance.

And he continued: “For example, those who received about two thousand dollars paid 55 dollars in taxes on their salary, but today those who receive the same amount and with the new tax increases must pay 25 percent of the value of the salary, and those who receive 4 thousand dollars pay Taxes with half salary is about 700 dollars”.

Opinion of the General Union

In his interview with Sky News Arabia, the head of the general labor union, Beshara Al-Asmar, described the tax hike as “unfair to private sector employees”.

He explained that “it includes workers and employees of the port of Beirut, of the aviation sector, hospitals, banks and workers in industrial and commercial establishments”.

He also revealed that the federation presented to the Finance Minister “a solution plan, which provided for the raising of the value of family deductions for the employee’s family (wife and children) to reduce the tax burden on him, from the limits of 60 million pounds to 240 million pounds, provided that the tax is collected on the basis of 15 thousand pounds to the dollar, no dollars on the official trading platform, 30 thousand pounds, because it is volatile and unstable.

Al-Asmar continued: “We have promised the Finance Minister well, and we have asked him, in the event that the proposed solutions are not possible, to postpone the matter so that it can be studied with the union, because it provides for the imposition of large amounts of corporate and personal taxes, and carries retroactive status from the beginning of 2022.

At the end of his interview with “Sky News Arabia”, he underlined the need to “eliminate the retroactive effect and not displace educated and qualified employees abroad”.

He said: “We look forward to a solution to the crisis and high taxation, if implemented, could help move companies to other countries as well.”

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