THE DAY after telling parliament the Church would not pay a cent in tax arrears, outspoken Archbishop Chrysostomos II yesterday said the tax issue was an effort to turn people against his institution.
“The issue is not financial. The issue is political,” Chrysostomos II told state radio. “They are resorting to populism to turn the people against the Church. But I told them many times, they are trying in vain.”
Chrysostomos II insists on sticking to an agreement made with the previous administration in 2006 that was never ratified.
Auditor general Chrystalla Yiorkadji has said that that agreement was unfavourable to the state.
“We had visited all the party leaders and they all reacted positively,” the primate said. “And if it had gone to Parliament they would have approved it.”
Yiorkadji has said that the agreement wrote off tens of millions in past dues and restored privileges.
The auditor-general yesterday found herself on the receiving end of some bitter words.
“They should stop being populist. It is not the parties who are being populist,” Chrysostomos II said.
He slammed Yiorkadji for scouring through files to find a 40-year-old deal Archbishop Makarios – who was president at the time – signed with the government, giving the state some 15,000 donums (1 donum is around 1.337 square metres) of land in return for the state paying part of rural priests’ wages.
“And she raked it up and took it to the president to show off,” Chrysostomos II said.
Yiorkadji, an independent state official was defended by Attorney-general Petros Clerides.
“Ulterior motives cannot be attributed to us every time we act,” Clerides told reporters. “Why is what Ms Yiorkadji wrote populism?”
Clerides said the auditor-general would keep her position until she retires.
“She doesn’t have to be liked by anyone – not even the President,” Clerides said.
In a deal which Makarios effectively made with himself, the state agreed in 1971 to pay part of the wages of rural priests – the same amount as half the wage of an entry-level teacher – the total of which at the time amounted to around €342,000.
However around 70 per cent of the land in question is now in the Turkish-occupied areas, and the income from the remaining land is negligible compared to what the state pays.
Between 1983 and 2004, the state paid around €54.5 million in priests’ wages and received only some €536,000 from rent.
As the cost spiralled, in 1992 the cabinet approved disengaging the subsidy from the entry-level teachers’ wage since that was upgraded.
The auditor-general has suggested that since conditions had changed since the time the decision was taken, that the issue be “re-examined and reviewed, taking into consideration the current financial state of the Church.”
The Archbishop’s attack came a day after he told parliament that the Church would not even pay one cent of some €169 million in tax arrears owed for decades.
Even if the state went to court and won, the Church would not pay, Chrysostomos II told lawmakers.
The Church is not exempt from paying certain taxes, but embedded in the constitution is an article that forbids anyone from appropriating Church property without its consent.
The law on income tax exempts the Church on incomes like donations and rental payments.
The Church currently pays capital gains and property tax as it is mandatory before any property transfers can go through.
