Top Lebanese banker warns against raising interest income tax

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BEIRUT (Reuters) - A top Lebanese banker warned on Thursday that a proposed hike in the tax on interest income would affect capital flows to Lebanon, weaken banks’ ability to play their financing role in the economy, and obstruct growth. The Lebanese government is currently discussing a draft 2019 budget that would raise the tax paid on deposit interest income to 10 percent from 7 percent. Interest income had been tax free until the levy was introduced last year. Lebanon is saddled with one of the heaviest public debt burdens in the world and Prime Minister Saad al-Hariri’s government has vowed to enact long-delayed reforms to put state finances on a sustainable path.

Joseph Torbey, chairman of the Association of Banks in Lebanon, said Lebanese banks hope to see the government succeed in agreeing an austerity budget, calling for a “fundamental reduction” in spending. But, addressing a Beirut economic conference, Torbey warned against underestimating the impact of “subjecting the banking system and its deposits to seasonal taxes at every opportunity - as happened last year” - a reference to the new levy in 2018. This “may be repeated today through raising the tax rate on deposit interest to 10 percent, affecting capital flows to Lebanon, weakening the ability of the banking sector to play its its financing role, negatively affecting interest rates and the cost of financing the Lebanese economy, and obstructing growth”. Finance Minister Ali Hassan Khalil told Reuters the draft budget projects a deficit of less than 9 percent of GDP compared to 11.2 percent in 2019.

The budget, seen as a critical test of Lebanon’s will to reform, is based on an economic growth forecast of 1.5 percent in 2019, which could rise to around 2 percent as the economy picks up, Khalil said. Lebanon’s public debt issome 150 percent of GDP. State finances are strained by a bloated public sector, high debt servicing costs and hefty subsidies spent on the power sector. Serious steps toward reform could unlock $11 billion in financing pledged at a donor conference last year to help Lebanon build infrastructure to boost economic growth. (Reporting by Tom Perry, Ellen Francis and Laila Bassam Editing by Mark Heinrich) Our Standards:The Thomson Reuters Trust Principles.

Lebanese gov’t cracks down on “fake degrees”

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by thepienews.com --Four universities in Lebanon are being investigated for selling fake degrees, which has led to more than 40 people being arrested, with the country’s director general of Higher Education being implicated. According to The National, Ahmed el-Jammal was the highest profile to have been taken into custody in a spate of arrests in a scandal surrounding fake-degrees. In 2018, the American University of Culture and Education and the Lebanese French University received warnings from the government and a fine said to have been around US$45,000.

Saida University College has reportedly closed, while the fourth university involved – the Arts, Sciences and Technology University in Lebanon – is still under investigation. “I’m not surprised by corruption in the public sector, but this goes beyond anything imaginable and really undermines the credibility and values of education,” one university professor, who asked to remain anonymous, told The National. “These things are always very worrying,” the chief executive of British Accreditation Council Paul Fear said, but it will be difficult to establish the facts. The organisation reaccredited the American University of Culture and Education in January 2017. “We often get more information coming from students talking to each other and then telling us and putting us in touch with the right source of information,” he added. “The biggest concern we have is degree mills – organisations who are printing degrees or awarding degrees without students having to do the work,” Fear told The PIE News. “British universities have a lot of relationships and degree sharing programs of different types with almost every single country in the world. “It’s a responsibility of everybody involved in higher education everywhere to make sure that the right controls and oversight are in place to stop this kind of thing happening,” he added.

Lebanese Cabinet Begins Discussing Austerity Budget

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BEIRUT — Lebanon's finance minister says the government has started open-ended discussions to quickly approve the country's draft austerity budget. Lebanon's economy is suffering from slow growth, a high budget deficit and massive debt. Ali Hassan Khalil told reporters after a Cabinet meeting Tuesday that the government aims to reduce the percentage of the budget deficit compared with the gross domestic product. Leaks through the media about steps that could include cutting end of service and social benefits of civil servants have led to protests around Lebanon by retired military personnel and others. The Labor Union called for a three-day strike starting Thursday if workers' demands are not met. Khalil said he does not know the reason behind the call for the strike adding that the budget has not been approved yet.

Jason Tuvey, Middle East economist at Capital Economics, said it would be extremely difficult for politicians to agree enough austerity measures, which are deeply unpopular. "We still think the Lebanese authorities will ultimately be forced to turn to some sort of debt restructuring," he said. In Tuesday's protest, a few hundred veterans gathered in front of the central bank, the finance ministry, and Beirut port, rallying against any potential cuts to their pensions. "This is our right, our sweat and blood," former sergeant major Khodr Noureddine said. "Our salaries can't even feed us for a day, there's no school funding, no good healthcare." A spokesman for the protesters, retired brigadier general Ali Omar, vowed they would remain in the streets to ensure they keep their pensions. He said cuts would hit tens of thousands of people, including wounded or handicapped soldiers, and families of killed soldiers.

The start-ups brewing change for Lebanon's workers

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ZALKA, Lebanon (Thomson Reuters Foundation) by Heba Kanso - Farah Ballout’s big, infectious smile is the first thing that greets you at her workplace, a cafe in Lebanon with a mission to do more than just brew coffee. Before she was hired the 29-year-old, who suffers from Angelman Syndrome, a genetic disorder that means she has developmental disabilities, had struggled to find work in a country with high unemployment. “I feel like it is a dream that I started here,” Ballout said as tears rolled down her face. “It feels like you are walking into your home - it doesn’t feel like you are going to work.” Almost all the 14 staff at the Agonist coffee shop near Beirut where Ballout has worked for the past five months have special needs, from autism to Down’s Syndrome.

Wassim El Hage set up the business in December to help people with disabilities, who are typically excluded from the workforce in Lebanon. As a social enterprise - a business that aims to do good as well as make profit - it faces even more of a challenge than most start-ups in a country whose economy has been badly hit by years of political instability and a mass influx of refugees. The country is grappling with an unemployment rate of 30 percent and last year, nearly 2,200 businesses closed, according to Lebanon’s chamber of commerce. For El Hage, that was part of the motivation - Lebanon, he said, desperately needs organizations prepared to hire people who would otherwise struggle to find jobs. “It is not my target to make money or to make profit for my own self. My target is to give them back this money [for them] to be integrated, to be independent, to have a real life,” he told the Thomson Reuters Foundation. “We need it in Lebanon.”

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Debate on lifting WhatsApp, Skype call ban in UAE

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by khaleejtimes.com --Debate about lifting the ban on Voice over Internet Protocol (VoIP) has erupted again in the UAE following comments of a popular Emirati commentator and columnist. "It's so frustrating that Skype is banned in the UAE. How are we meant to conduct interviews and meetings? Such a contradiction in 2021 & 2071 Visions goals," said Sultan Sooud Al Qassemi, who is a well-known lecturer and researcher on social, political and culture affairs in the Arab Gulf states. A Twitteratti Yousif said removal of ban on free calling apps is long overdue here. "Lifting the ban on Skype and FaceTime is really overdue. Also, Internet service at home is mostly monopolised by one provider (Du or Etisalat). Mobily (UAE's Etisalat) changed the game in Saudi market, hope something like that happens in the UAE, or regulator gets involved," Yousif said in a reply to Al Qassemi's tweet. Emirati businessmen and celebrities had raised their voice time and again to end the blockade on VoIP in a bid to make the Emirates smart and its residents happier.

In September 2018, Dubai-based Emirati billionaire Khalaf Al Habtoor, chairman of Al Habtoor Group, had called on the UAE's telecom service providers Etisalat and du to unblock VoIP services so that the UAE residents can make free calls through WhatsApp and Skype. He had stressed that unblocking VoIP is essential as the UAE strives towards becoming number one in every sector - including telecommunication. "A lot of people use WhatsApp and Skype call everywhere in the world. (they're) free all over the world except in my country. The telecom companies (in UAE) are blocking it and not allowing it. Therefore, I like to request the management and directors of these companies to release and free the system and enable everybody to enjoy it," the billionaire had said in a video statement. "We always here in the UAE want to be number one in everything. But why we are lagging as far as communication is concerned. Our and our leaders' aim is to be number one. So I request telecom firms to release (VoIP) for everybody in the UAE everywhere," said Al Habtoor.

The Telecommunication Regulatory Authority (TRA) maintains that the availability of VoIP is the choice of licensed telecommunication providers - du and Etisalat. The UAE telecom services providers had launched their own VoIP calling cards which give residents more time for international calls.

Former Nissan Chief Carlos Ghosn's Trial Expected To Be Delayed: Report

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by AFP -- TOKYO, JAPAN: Former Nissan chief Carlos Ghosn's trial, which was expected to begin in September, will be delayed, local media said Saturday, hinting that it may not start this year. The 65-year-old tycoon, currently on bail, is preparing for his trial on four charges of financial misconduct ranging from concealing part of his salary from shareholders to syphoning off Nissan funds for his personal use. The Tokyo District Court had proposed to start his trial in September during its pre-trial meetings with his defence lawyers and prosecutors, news reports said, quoting unnamed sources. But the court told the lawyers and prosecutors on Friday that it had retracted the plan without proposing a new time frame, Kyodo News said, adding that the move could mean the trial will not start this year. The court also decided not to separate the trial for Ghosn, his close aide Greg Kelly and Nissan -- all indicted on the charge of violating the financial instruments law by underreporting Ghosn's compensation, according to Kyodo.

His lawyers have so far demanded he be tried separately from Nissan and have voiced fears he will not receive a fair trial. The Sankei Shimbun also said prosecutors gave up filing an appeal to the Supreme Court against his bail, a move to erasing a chance of his return to jail unless he is arrested again on fresh charges. Immediate confirmation of the news reports was not available. On Thursday, Ghosn exited his Tokyo detention centre after accepting bail of $4.5 million under strict conditions, including restrictions on seeing his wife. His case has captivated Japan and the business community with its multiple twists and turns, as well as shone a spotlight on the Japanese justice system which critics say is overly harsh. Ghosn denies all the charges, with a spokesperson for the executive saying on Monday he would "vigorously defend himself against these baseless accusations and fully expects to be vindicated". In a statement hours after his release, Ghosn said: "No person should ever be indefinitely held in solitary confinement for the purpose of being forced into making a confession." COMMENT The dramatic case has thrown international attention onto the Japanese justice system, derided by critics as "hostage justice" as it allows prolonged detention and relies heavily on suspects' confessions.