Deputies slam share profits tax

D.I.S.Y. deputies yesterday accused Finance Minister, Marcos Kyprianou, of adopting contradictory policies on the treatment of those who lost money in the stock exchange fiasco of 1999-2001.

Prodromos Prodromou and Maria Kyriacou condemned a move by the Inland Revenue to send warnings to investors to pay off taxes on profits made in 1999 during the stock market bubble. They argued those very same people were being considered for government assistance for the millions they lost in the chaos that ensued in the years 2000 and 2001.
Prodromou described the move as “almost provocative” and called on the minister to show flexibility and take into account the evident distortions in the current tax system.

Kyriacou proposed extending the tax on share transactions from 1999 to include profits and losses made in 2000 and 2001. That way people who made millions in 1999 but lost them the year after would not be taxed only on profits made in 1999.

A special law was passed which allowed the government to tax profits on share transactions in 1999 by five per cent but this law did not allow the tax collector to take into account any losses made when the stock market crashed the following year.

Kyriacou argued that the new legal proposal would allow investors to set off their profits against their losses until December 2001, thereby avoiding taxing profits which were lost immediately.

She highlighted that most investors were now burdened with heavy losses and costly investment loans. By extending the law on taxing profits to 2001, the bill would set off the interest paid on investment loans by counting it as ‘expenditure’ for tax purposes.

The DISY deputy argued that most EU countries allowed individuals to set off their profits against their losses in share transactions for a three-year period. The deputies plan to introduce the bill at the next House Finance Committee meeting.