THE GOVERNMENT yesterday unveiled a fresh package of measures which includes the exemption of Turkish Cypriot traders from VAT and facilitates the transport of people and goods using Turkish Cypriot taxis, lorries and buses.
The measures were in the form of proposals to the European Commission and were announced during a news conference at the Presidential Palace by Trade and Industry Minister George Lillikas and Communications Minister Harris Thrasou.
Lillikas said the measures were aimed at easing trade transactions across the divide and would further develop economic relations between Greek and Turkish Cypriots.
The minister stressed that the proposals only concerned products produced or processed in the north.
The government proposed that Turkish Cypriot traders would not be obliged to pay VAT, which would be paid by the buyer of the goods and services in the government controlled areas.
“This measure will allow Turkish Cypriots to sell their merchandise in the government controlled areas without registering on the VAT directory or observing other tax procedures,” Lillikas said.
Concerning the direct sale of products to consumers, Turkish Cypriots again would not have to pay VAT, but their products would be inspected and their quantity recorded at the checkpoints.
The same procedure would be observed upon the traders’ return.
VAT would be paid by Turkish Cypriots after they sold their products directly to consumers and if the value of the merchandise they planned to sell in one year exceeded £9,000.
Lillikas said the government also proposed to exempt from taxation products wholly produced in the north and to treat them as European.
“The free movement of the goods would be assisted and Turkish Cypriots would be able to trade these goods across the whole territory of the (European) Community,” Lillikas said.
The last measure concerned goods imported through the government controlled ports and airports and products sold by VAT-registered traders, which were destined for sale in the occupied areas.
According to Lillikas, these products would also be exempted from VAT.
Thrasou announced the government’s decision to provide temporary driving and road use licences to Turkish Cypriot trucks, buses and taxis to facilitate the transport of goods and people to the government controlled areas.
The licences would be valid for one year and would be issued after the vehicles underwent the necessary road-worthiness inspections by the authorities.
The decision involves vehicles belonging to Cypriots legally residing in the north, the minister said.
Relevant laws, information and booklets containing the material necessary to secure the certificates would be translated into Turkish, he added.
Lillikas said he expected the EU to agree with the government’s approach since its intention was to facilitate trade relations between the two communities and support the Turkish Cypriots financially.
The minister said no extra cost would arise from the implementation of the measures, adding that what was important was the development of the necessary relations and conditions that would lead to a solution of the Cyprus problem.
He added that if the measures were adopted by the EU they could be implemented immediately.
Commenting on the EU’s stance on the matter, the director of the president’s diplomatic office Tasos Tzionis noted that the proposals had been submitted to Brussels a month ago.
“The first reactions were encouraging and positive,” Tzionis said.
He added they were currently being processed and studied by the European Commission’s technical departments.
Lillikas warned against raising an issue concerning goods produced on Greek Cypriot properties: “If we open the chapter whether to accept the movement of goods because they are produced on Greek Cypriot properties we would be led to a dead end.”
Tzionis said he hoped that the measures would be welcomed by the Turkish Cypriot side because they were the answer to their concerns and demands from the Cyprus government.
