THE HOUSE of Representatives yesterday voted to abolish the professional tax levied by municipalities and local authorities on people working within their jurisdiction.
The amendments scrapping the tax come into effect on January 1, 2003 and will deprive local authorities of £14 million in annual income.
The majority of deputies asked the government to find other ways to support municipalities beyond the 1.5 per cent grant from state income.
Forty deputies voted in favour of the bill while two – Green party deputy George Perdikis and New Horizons deputy Christos Clerides – chose to abstain.
Perdikis said the bill took away the right of local authorities to finance themselves, while Clerides said he disagreed with the bill.
AKEL deputy Stavros Evagorou urged the government to honour its promise to find other ways of financing municipalities, while DISY deputy Prodromos Prodromou said it was not proper for local authorities to depend on state budgets.
The abolition of the tax should not be linked to the state grants, Prodromou added.
The Chairman of the House Finance Committee, DIKO deputy Markos Kyprianou, suggested that municipalities should put their finances in order, adding that the matter must be discussed before the House.
Kyprianou stressed that the increase of the state grant from one to 1.5 per cent did not cover the loss from the abolition of the professional tax.
KISOS deputy Doros Theodorou urged local authorities to manage their finances with prudence, pointing out that 70 to 80 per cent of the municipalities’ incomes were spent on salaries.
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