Filenews 21 March 2023 - by Eleftheria Paizanou
A new formula that will make the plan of regulating overdue tax debts by instalments more targeted, are looking for EDEK and ELAM, after the disagreement of the Ministry of Finance and the Tax Department to reinstate the plan with the same provisions as they were previously applied. This is because the plan was particularly generous, as those who paid their debts in a lump sum, that is, in one instalment, were relieved of 95% of the interest and charges with which they should normally be charged. In addition, the Government considers that enough time has been given to those affected to use a plan for the payment of their tax debts and the possible announcement of a new plan will cause a bad precedent and reactions from those who meet their obligations to the state on time.
Yesterday, representatives of the executive expressed before the Finance Committee their disagreement with the two bills of EDEK and ELAM. However, the two parties, at the urging of other MPs, will consider diversifying (reducing) the discount that may be granted to those who take advantage of a new plan. For example, the 95% discount can be reduced to either 40% or 50%. The reductions for the remaining instalments to be paid will be similar.
EDEK MP Elias Myrianthous acknowledged that the proposed new plan rewards inconsistent taxpayers, but stressed the need to support those who failed to join the previous repayment plans.
ELAM MP Sotiris Ioannou stressed that the Government and the Parliament must exhaust all efforts to collect the debts to the Tax Department. MPs from the other parties stressed the need to diversify and further target the plans.
On behalf of the Institute of Certified Public Accountants of Cyprus (ICPAC), Andreas Karaolis noted that the schemes will help taxpayers to pay their debts. Debts to the Tax Department for VAT reach €650 million. and for income tax €1.6 billion, until 2015.
The EDEK - ELAM proposals
The EDEK law proposal provides for the resumption of the plan to settle tax debts by 2015, after taxpayers have submitted their tax returns by June 30, 2023.
ELAM's draft law provides for an increase in debt repayment instalments to 120. According to the proposal, in case of a debt of up to €100,000, each instalment could not be less than €50, while, in case the tax debt is over €100,000, the minimum instalment to be paid will be €1,852.
The government's objections
On behalf of the Ministry of Finance and the Tax Department, it was said that the plan causes many problems and at the same time rewards inconsistent taxpayers. Senior VAT officer Naya Symeonidou said the legislation was extended 5-6 times and taxpayers had the opportunity to settle their debts. He said no further extension should be granted, as it creates problems in the collection of court decisions in VAT cases.
The competent officer of the Tax Department, Ioannis Zevlaris, said that the regulations create a moral issue with the good payers, who wonder why only they should pay on time. He also indicated that, under the law, when the debt settlement period expires, debtors can settle the debts they had until 2015 within six months.
