‘Church owes nothing to anyone’

THE CHURCH yesterday claimed it did not owe a cent to the state, denying it owed some €169 million in tax arrears.
“I want to say that the Church does not owe a single cent to anyone,” said Yiannis Charilaou, the Archbishopric’s financial controller.
And despite not being obliged to pay any taxes, “on the contrary, the Church willingly pays taxes,” Charilaou said.
However, according to the auditor-general’s report, on December 31, 2008, the Church owed around €169 million: €138 million in immovable property tax and €30 million in capital gains tax.
Auditor-general Chrystalla Yiorkadji said the constitution did not exempt the Church from taxation.
“It prevents the seizure and sale of church property without its consent,” but the Church must provide the necessary explanation.
According to the auditor-general, until 1999, the Church had refused to pay its capital gains tax, but despite that the transfer of the property still went ahead.
In 2002, Parliament amended the law, making the payment of capital gains tax mandatory before any transfers can go ahead – effectively forcing the Church to pay up.
The previous administration had had discussions with the Church leadership in a bid to resolve the issue and a preliminary deal had been reached, according to the Archbishop.
That deal was never tabled before the cabinet for approval and the auditor-general said it was unfair to the state.
Specifically, tens of millions in past dues were written off and privileges were restored, the auditor-general said.
“The state does not get any benefits against these concessions, since what the Church assumes to pay as taxes, it pays in any case in accordance with current legislation,” the auditor-general said in her report for 2008.
Charilaou said the agreement was made on the initiative of the Church and urged the government to take it before the cabinet for approval.
Earlier yesterday, government spokesman Stefanos Stefanou said the issue was still open “and we will continue to work to collect this money.”

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.