Don’t kill the banks

ENAR

In order to fund the proposed public sector wage hike, Lebanon’s Parliament is scrounging for cash. In their desperation, lawmakers have proposed one of the most morally hazardous ideas in public finance: taxing some profits twice. Not only is this an unfair idea, it is fiscally irresponsible and blatantly lacking in forethought. Double taxation is not only bad for the banks who would have to pay twice, but also for the country. Instituting such an economically unsound principle by legislative fiat would leave a very black smudge on Lebanon’s record as an investor-friendly environment — as if it needed yet another. At issue is a 7 percent non-deductible tax on interest banks earn on government-issued treasury bills and certificates of deposit. Currently, banks pay a 5 percent tax on these earnings but are then allowed to deduct them from their year-end corporate profits so they are not taxed twice. Making