By George Psyllides
PRESIDENT Tassos Papadopoulos yesterday insisted the government had no plans to impose new taxes to cover the £270 million in dues left behind by the previous administration.
The issue has sparked bitter exchanges between the government and the opposition, with both sides blaming each other for the poor state of the island’s finances.
It all started when Central Bank Governor Christodoulos Christodoulou warned last month that the fiscal deficit was spiralling out of control and that the government would have to take unpopular measures to bridge the gap.
But with no new taxes in the pipeline, the opposition challenged the government to say where the money would come from to cover the supplementary budget of around £300 million expected to be submitted for approval to the Cabinet today.
Papadopoulos, however, repeated that no new taxes would be imposed.
“We will proceed on the basis of the financial facts of the country; all these (claims concerning new taxes) are cheap arguments because the opposition have no answers other than to make people worried that we will tax them,” Papadopoulos said.
He said the government was still applying the budget drawn up by its predecessors and it was its duty to give a correct and precise report of the financial condition it had inherited so the public could draw their own conclusions later on.
Papadopoulos pointed out that when the House approved certain funds they should be paid at the time of approval and payments should not be postponed for the next year.
The new government, which took over in March, accused it predecessors of leaving £270 million in dues to be paid this year.
Papadopoulos rubbished accusations that his administration had managed to wreck the economic indicators in just three months since it took over.
Authorities now fear the fiscal deficit could rise to 5.3 per cent of GDP this year, the highest since 1998 and well above the three per cent ceiling set by the EU’s Maastricht criteria for single currency membership.
Finance Minister Marcos Kyprianou said yesterday that the £300 million in commitments made by the previous cabinet without House approval would be tabled before the Cabinet today.
Kyprianou said the forecasts presented by the previous government to the European Union were wrong and that the new government needed a long time to explain to the EU why they had the wrong forecasts.
“We think that cooking the books is a third world practice; we give a real picture with transparency,” the minister added.
Kyprianou ruled out the possibility of the EU imposing sanctions on Cyprus over the affair.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
