THE CHURCH owes the state €85 million in taxes, said the Auditor-general. The total bill, with taxes and penalties, according to the Auditor-general would be in the region of €169 million, an amount that would go some way in helping ailing state finances. And if the finance minister finally implemented his proposal for calculating property tax on current valuations of land, the tax bill of the Church, the island’s biggest landowner, would be even higher.
But when it comes to the Church’s tax debts, Archbishop Chrysostomos keeps an uncharacteristically low profile, avoiding expressing his views in public. This is the only issue of public concern on which Chrysostomos has no desire share his opinions with the people. He is smart enough to know that it is an argument he could not possibly win and that anything he might say would provoke the hostility of ordinary people who pay their taxes on time and do not enjoy the opulent life-style of our top clerics.
Successive governments have repeatedly tried to reach some settlement regarding the Church’s tax arrears but despite offers of discounts by ministers the high priests have refused compromise – they just refuse to pay, even though they run by far the wealthiest organization on the island. Is the Church exempt from taxation? Not according to the Auditor-general, who very clearly stated at the legislature on Tuesday that “the Constitution does not exempt the Church from taxation.”
Why is the Inland Revenue Department not taking legal measures against the Church? There is no other organization in Cyprus which owes that amount of money in taxes to the state so it would make sense for the Department to try to collect its debts at a time of severe cash shortages. It is also a matter of the rule of law that we always boast about. Do we have rule of law when the executive does not make an effort to collect taxes owed by the country’s biggest tax debtor? It would help the economy as the Church may be forced to sell a significant number of its overpriced plots, at more reasonable prices in order to pay its bills.
One of the main arguments Archbishop Chrysostomos uses in his anti-settlement rants is that the Cyprus Republic must be preserved at all costs. But his awe-inspiring respect for the Republic ceases to exist when it comes to honouring the Church’s tax obligations to it. This may explain why he is so vehemently opposed to establishment of a federal state. It might not exempt the Church from taxation as the Republic has been doing, in violation of its own constitution.
