Controversial law set to cost state £250m
THE PLENUM yesterday passed a bill that will offer tax amnesty for pre-2002 debts.
With 35 votes in favour, nine against and one abstention, the House approved a law that will enable the special settlement of tax debts that have been declared but not yet paid.
The new law will release debtors of their obligation to pay interests and additional expenses, provided they settle their debts within six months from the date the law comes into effect.
DIKO and the EVROKO voted against the bill, requesting a postponement of the discussion until after the presidential elections, while DISY’s Socrates Hasikos abstained as he owns a company that has tax debts.
Tempers were raised when EVROKO head Demetris Syllouris justified his request for a postponement by referring to the Attorney-general’s indication that the bill was unconstitutional as it encouraged unequal treatment.
DIKO agreed with this opinion, which provoked a reaction by DISY and AKEL deputies, who said the draft bill had been co-signed by all parties before it reached the Plenum.
Syllouris explained that the bill was “blatantly unconstitutional” as it deducted income from the state and encouraged unequal treatment.
“The state is being deprived of £250 million in total because of this bill,” he said, adding: “We cannot deprive the state of £250 million with a light heart.”
He then described the draft law as “a pre-election tool”.
This provoked an angry reaction by House President and presidential candidate Demetris Christofias, who pointed out that he has always made sure he warned Committees to be careful on constitutional matters. He added that he could not ban the bill’s discussion as the draft had been signed by all parties.
AKEL deputy Nicos Katsourides intervened to point out that EVROKO and DIKO were aware of the bill’s constitutionality when they signed it, but “changed their stances for other reasons”.
He then criticised Syllouris for misleading Parliament into thinking it would be “giving away” £250 million of the state’s money.
“You are doing this consciously,” he told the EVROKO leader. “We are talking about £80 million and out of that, £15 million will be given away and the rest will be taken by the state.”
DISY and EDEK were also against a postponement of the discussion, with DISY deputy head Averoff Neophytou wondering whether a delay would magically make the bill constitutional.
He added that according to the Inland Revenue Department, pending tax returns amounted to £186 million, and not a quarter of a million as Syllouris had supported.
But DIKO MP Nicolas Papadopoulos was of the opinion that the new law would bring more problems than there are currently. He also justified his party’s decision to go back on its signature by pointing out that the committee had not yet heard the AG’s opinion at the time of signing the bill.
“If we approve this legislation today, we will be passing it knowing that it will not be implemented,” Papadopoulos pointed out.
“This bill will send the wrong messages to taxpayers,” he added.
The Chairman of the House Finance Committee, DIKO’s Antigoni Papadopoulou, agreed, saying the matter needed further examination.
EDEK and the Green Party also voted in favour of the bill.
