Filenews 24 May 2022 - by Eleftheria Paizanos
Although the lawyers are in favour of introducing a procedure for the electronic payment of stamp duty, as it will help to serve the citizens, they express reservations that the regulation promoted by the government may affect the 2% "commission" received by local bar associations from the sale of stamps.
Yesterday, the House Finance Committee discussed the bill amending the Stamps Act, which gives the power to the Minister of Finance to determine the procedure and modus operandi of alternative stamping, including stamping using electronic means.
On behalf of the Cyprus Bar Association, concern was expressed that they will have a 2% loss of revenue from the sale of stamps. As it was said, stamp duty of about €8 to 9 million is sold annually, of which the bar associations receive a 2% commission, i.e. close to €180,000. It is worth noting that every year the state receives around €40 million from the sale of various stamps. In a letter to the members of the Finance Committee, the Cyprus Bar Association supports the repeal of the existing legislation and the framework for stamping documents, in the context of a broader tax reform. At the same time, he says that until the implementation of a reform, he is in favour of introducing electronic payment of stamp duty, as it will help to serve the citizens. As the association argues, however, for decades local bar associations have had an income of 2% as a commission from the sale of stamps. "The adoption of an electronic stamping system will affect the way in which these amounts are calculated and paid to local bar associations (possibly to other stamp post-sellers), who rely on that income," he adds. At the same time, it stresses that in the context of the public consultation on secondary legislation, the way in which the payment of these amounts is calculated should be considered. Concluding, the Lawyer emphasizes that this issue should be regulated by regulations instead of by decree of the Minister, as provided for in the bill.
The position of the Association of Banks for electronic payment
The chairman of the Finance Committee and member of the DIKO Christiana Erotokritou, called on the Ministry of Finance to give MPs a copy of the relevant decree. The Association of Banks is asking for the deletion of the provision regulating the payment of stamp duty electronically, which provides for the issuance of an electronic receipt with a unique digital number attached to the documents.
He argues that this provision should be deleted to allow the existing alternative procedure followed by credit institutions, as well as other companies that make mass payments, to be maintained. He adds that credit institutions are currently following an alternative procedure for paying stamp duty, which allows them to make mass payments at regular intervals, pointing out that through the decree a way must be found to keep it in place. A spokesman for the Ministry of Finance noted that no decree can be issued, stressing that what is currently in force will also apply to electronic stamping.
