LAST SUNDAY, a newspaper published a list of the tax-free allowances paid to deputies and a collection of top-ranked state officials including the president, ministry permanent secretaries, Supreme Court judges and commissioners.
Known as a ‘representation allowance’, it is €18,000 per year for most state officials while for deputies it is €22,000. The president’s aides – government spokesman and presidential under-secretary – receive the highest representation allowance of €33,000, presumably because their basic salary is a bit lower than a minister’s and not because they have great ‘representation’ needs. These allowances were not always so high, but the government increased them last year by about 50 per cent.
The officials who enjoy the privilege of a substantial, tax-free, annual income could be described as the country’s nomenclature, as they have a right that is not enjoyed by any other citizen. An individual working in the private sector is entitled to zero tax-free income even though he or she may need to spend more money on their personal ‘representation’ than a Supreme Court judge, the assistant Attorney-general and a ministry permanent secretary, for whom socialising and networking is not part of their responsibilities.
Until a few years ago, a company executive was allowed a ‘representation allowance’ of 600 pounds (€1000) a year, but it was abolished, because the Inland Revenue Department decided he or she could survive without such an allowance for image purposes. The Department, we are certain, does not believe a Supreme Court judge or the chairman of the Public Service Commission requires such an allowance either, but it has never challenged this state-inspired scam of lawful tax evasion.
Nor would it ever do so because there has always been solidarity among the members of the Cypriot nomenclature and everyone knows that the ‘allowance’ is just a ruse for boosting the income of the privileged few who, as Orwell said “are more equal than others”. This is not all. The untaxed income goes towards the calculation of the pensions of these public servants, who are paid extortionate state pensions, without contributing anything to them from their salary – so much for equality before the law.
We should not be surprised that the biggest beneficiaries of this legalised tax evasion are the lawmakers, who never tire of reminding us that we have the rule of law in Cyprus, implying that the law treats all citizens equally. This is blatantly untrue, when we consider the privileges enjoyed by our deputies. Apart from being the only people in Cyprus entitled to a tax-free car, they also receive a ‘representation allowance’ of €22,000 plus a ‘travel allowance’ of €8,200, over and above their salary of €44,356.
Most of them also have day jobs from which they earn significant income, thanks to the high public profile they have as deputies. Yet a travelling salesman, who is provided with a company car to do his job, is taxed for enjoying a ‘benefit in kind’, even though travelling is part of the job – as it is in the case of deputies – and the car is an essential tool of his trade. It makes no sense, but a salesman has to accept, like the rest of us who do not belong to the state nomenclature, that he is a second-class citizen.
Perhaps we are third-class citizens. The head of the public servants union PASYDY, the most privileged group of workers outside the state nomenclature, was complaining on Wednesday because deputies enjoyed even more benefits than his members. A deputy was entitled to a golden handshake of €200,000 and state pension of €4,680 after two terms – 10 years – which was what a top civil servant received after 40 years of service, he complained.
As long as citizens do not protest about this state-sponsored discrimination against them, the members of our nomenclature will continue voting, morally indefensible, privileges for themselves that set them apart from the rest of us. A third class citizen could file an appeal against the blatant discrimination practised by the Inland Revenue Department, but would such an appeal be upheld by Supreme Court Judges, themselves beneficiaries of this provocative, discriminatory practice?
And with what moral authority can the state initiate a clampdown on tax evasion when there is a law in place allowing its highest earning officials twice (in some cases three times) as high non-taxable income than the rest of us? If all citizens were treated as equals there might not have been as much tax evasion.
