News Column

No more escape for tax cheats

June 20, 2014



By Elias Hazou

THE House last night passed a number of laws whose enactment was a condition for the release of the fifth bailout tranche for Cyprus, including two bills empowering the taxman to seize debtors' bank accounts and assets.

Authorities will now be able to seize tax debtors' bank accounts, confiscate their movable assets and prevent the transfer or sale of their immovable property until the dues are paid.

Following amendments introduced by lawmakers, a person's movable property will be confiscated or held for tax arrears of 5,000 and over, instead of the lower 2,000 threshold stipulated in the original government bill.

For tax arrears of 3,000 or more, authorities will be able to seize bank accounts and to block the alienation of immovable property; the government bill had set the threshold at 2,000.

Under another amendment, the amount to be left untouched in a debtor's bank account after funds have been taken to repay taxes owed was raised from 1,000 to 2,000.

The measures are aimed at improving the state's tax collection. A total of 526m is due to the Inland Revenue Department (IRD), of which 165m owed by just 127 persons or business entities. The 526m is the amount established as being receivable.

AKEL MP Stavros Evagorou said that in reality the taxes due come to 1bn, of which 850m is from a small number of persons, whom he claimed are the same people owing the largest amounts to banks.

DIKO chairman and MP Nicholas Papadopoulos said the legislation would help the crackdown on tax evasion, but issued a warning to tax authorities that, should they go overboard, parliament would enact new laws restricting their powers.

He also noted that whereas the state can now sequester people's bank funds and assets, citizens owed money by the state could not do the same.

Also passed was a government bill mandating self-taxation by corporations and self-employed persons, as well as legislation specifying the deadline by which the IRD must complete tax returns to wage earners.

Parliament also approved a bill making the non-payment of taxes a criminal offence. It makes company directors personally and criminally liable for failure to pay taxes or for providing false data.

Another item was a change in the composition of the Resolution Authority for financial institutions. The governor of the Central Bank of Cyprus (CBC) and two of the CBC's executive board members will comprise the new Resolution Authority, tasked with implementing relevant legislation, making decisions and issuing decrees or directives. To date, the Resolution Authority was comprised of the CBC governor, the finance minister and the head of the Securities and Exchange Commission.

A bill establishing Guaranteed Minimum Income has been submitted to parliament; it goes to committee early next week and is slated to be put to a vote on Thursday, as will a bill providing for the establishment of an agency in charge of settling out-of-court financial disputes. These two items must be passed by the end of the month.

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Source: Cyprus Mail


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