GOVERNMENT measures to offset recent VAT hikes on foodstuffs and pharmaceuticals may not have been announced yet, but that hasn’t stopped arguments breaking out over the details.
Labour Minister Sotiroula Charalambous yesterday announced that the package was “90 per cent complete” and would soon be presented to President Demetris Christofias for approval.
Some final details needed to be ironed out, she added, while the plan also had to be examined by technocrats.
The minister said the aim of the measures was to make up for the losses that are suffered by vulnerable sectors of the public from the new 5.0 per cent VAT.
She said the offset measures would either be submitted in the form of a one-off payment, or in another form – such as a percentage on the monthly wage.
Citing sources, the CyBC reported on Friday night that the government’s package was estimated to reach around €20 million, with 70 to 80 thousand beneficiaries.
The same sources claimed the measures would target pensioners with very low pensions, those who have been unemployed for over six months, workers in the private sector who don’t receive the cost of living allowance (CoLA), large families and households with revenues lower than the taxable income (€18,500).
This latest bit of information caused DISY MP Maria Kyriacou to voice her concern over yesterday.
“DISY agrees that pensioners living under the poverty line should be reinforced,” said Kyriacou. “But I wonder how it will be possible to spot the households that have an income lower than €18,500 and especially when these involve self-employed who currently have no work and are finding it hard to survive.”
The MP suggested the government’s incentives would be more beneficial if they were aimed towards promoting more developments, thus opening up more job opportunities.
“The government needs to stop keeping development works in the drawers, being obstructed by bureaucracy and formalism,” said Kyriacou.
She called for some serious changes in the way families are taxed, saying it was wrong to sponsor a family of three in the same way a family of six is funded.
“The large families have been truly affected by the increase in taxes on food and pharmaceuticals,” said Kyriacou.
In response, Charalambous called on the opposition party to finally decide on its official stance for the offset measures.
“Half of DISY is accusing us of delaying offering counterbalancing measures and the other half is saying we shouldn’t give them,” said Charalambous. “We have discussed this in depth with the Finance Minister and we are at the final stages of forming the package, which will have measures that are well aimed, will help the sections of the population that are dealing with the biggest problems, due to their incomes.”
The aim, she added, was to ensure the public’s purchasing power isn’t affected by the hikes. “A reduction of the purchasing power is related to the development of the economy. At the same time, we are also thinking of measures that will help support development, in combination with measures that will help in the direction of employment.”
So if DISY has anything creative to propose then it should go ahead and do so, said Charalambous. “But this game of half of them saying we are delayed and the other half saying not to give the incentives as it would create a vicious circle, I think it should end and they should finally decide what they want and what their policy is,” she concluded.
