A DAY rarely passes by without us hearing of at least one union leader demanding that the state turn its attention to taxing those “who have and hold” wealth.
It is one of those meaningless slogans used ad nauseam in a crude attempt to deflect attention away from the big disparity in wages between the private and public sector.
The fact that it is used by public sector union bosses and the communists is no coincidence. It is all part of the propaganda campaign aimed at covering up the institutionalised discrimination practised by the state in favour of public employees at the expense of all other workers.
This idiotic slogan also implies, very misleadingly, that the main reason for the big budget deficit is the state’s failure to collect taxes, rather than the bloated public sector, the cost of which has been growing by about 10 per cent every year.
But the state’s tax collection is relatively efficient; it has always been much more effective than Greece’s, so no comparison is justified. This is not to say that the government should not clamp down on tax evasion by tightening its checks and controls.
Existing legislation gives big discretionary powers to tax inspectors, so why do they not use them in pursuing the tax cheats? In Cyprus there is so much ostentatious consumption it would be very easy for the authorities to find out who has been tax evading.
Instead, the government has drafted a bill making it compulsory for all service providers to issue payment receipts – the buyer of services would also be legally culpable for not demanding a payment receipt – as if this would substantially increase the state’s tax revenue.
There is one very simple measure to increase tax revenue – tax all the benefits in kind enjoyed by public sector workers as is the practice for private sector employees.
The use of a government-provided car, the provision of free health care and all other benefits including the ‘representation allowance’ (€18,000 in the case of senior state officials) paid to the highest-paid officials should be taxed.
This would not only increase state revenue significantly, it would be taxing those “who have and hold” wealth among the top salary earners, as the union leaders have been demanding.
A company executive/owner pays tax on all benefits he or she enjoys, so why are top state officials who are in the top earning category, treated differently? They are also members of the wealthy class and should also contribute as the union bosses are demanding.
