Tax amnesty earns government rare budget surplus

A CASH windfall from a tax amnesty kept Cyprus’ public finances in a rare surplus in the first half of the year, state accounts published yesterday showed.

There was a £37.1 million surplus in the first half, or 0.5 per cent of GDP, the statistics department said.

The figures are not indicative of the whole year, which authorities expect to end with a shortfall of 2.9 per cent of gross domestic product.

Cyprus hopes to join the euro zone in 2008 and has aggressively tackled budget deficits which spiralled in recent years. The tax amnesty was a one-off offer for people to come clean on cash previously concealed from the authorities.

Revenue for the first half rose to £1.493.5 billion and expenditure was 1.456.4 billion.

The primary money-spinners for authorities were taxes on production and imports, value added tax, income and wealth tax.

The state payroll accounted for about one third of expenditure, followed by benefit payments. (R)