Akel says it will vote against tax package

By Martin Hellicar

MAIN opposition party Akel yesterday gave the official “thumbs down” to the government’s key tax package.

Party spokesman Nicos Katsourides said the package as presented to parties would hit the poor hard and warned Akel would do all in its power to block its passage through the House.

Katsourides’ statements, coming after a party meet, were bad news for Finance Minister Takis Clerides, who has been doing his best to woo parties into approving his tax hikes. The government does not have a majority in the House.

The package — details of which have not been released — is thought to include a two per cent rise in VAT, increases to fuel tax, a 20 to 25 per cent road tax hike, a £5 a month tax on mobile phones and a proposal for the liberalisation of interest rates.

Katsourides said the package would net the government £225 million over two years and provided for only £21 million a year in tax concessions to lower income groups.

“If these proposals are adopted, the burden will undoubtedly be unbearable for the masses,” Katsourides told a news conference.

He also complained that the government had ignored Akel’s suggestions on taxation. “The government has not adopted even one of our suggestions which aimed at placing the burden of taxation on those who have,” he said.

Katsourides said Clerides’ tax package was a carbon copy of one submitted to the House by his predecessor Christodoulos Christodoulou last summer. Christodoulou’s package was thrown out by the House amidst criticism that the minister had failed to consult with parties beforehand.

Clerides has done his best to avoid the same pitfalls, presenting his package to parties for consideration well ahead of its going before the plenum.

Governing Disy have welcomed the tax package as a “well-balanced” proposal but it has been slammed by both smaller opposition parties, Diko and Edek, as well as by Akel.

The package is expected to go before the House plenum this month. Clerides has said tax increases are vital for economic recovery.

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