NICOSIA - House Finance Committee members yesterday discussed the draft bill that will unify the Inland Revenue and VAT tax departments under one roof, amid opposition from political parties, unions and professionals.
Speaking at the committee meeting, Finance Minister Harris Georgiades said that the draft bill is a prerequisite for the disbursement of the next instalment of bailout cash and must be approved by the House by June 10.
Opposition parties, the civil servants’ trade union (Pasydy) and the Institute of Certified Public Accountants of Cyprus (ICPAC) expressed their reservations regarding meritocracy in the appointment of a tax supremo.
Georgiades pointed out that the Troika has demanded the unification of the two departments and a fixed term for the tax chief.
Pasydy also expressed its opposition claiming that the unification of the Inland Revenue and VAT departments is unconstitutional, while the ICPAC objected to the fact that the tax chief will not be a member of the institute.
According to the draft bill, the new entity will be renamed Taxation Department and new positions will be created for the tax supremo as well as three deputies, who will manage both direct and indirect taxes.
According to the bill, the organisational structure of the new department will be based on the best international practices, while the managerial team will be appointed by the Cabinet with a justified decision after suggestions are made by the Finance Ministry.
Term in office will be five years for the tax chief and four for the deputies, with the possibility to renew the contracts for an additional term.
As the Finance Minister has stressed, the unification of the two tax departments and the creation of a fiscal council are prerequisites for the disbursement of the next instalment of cash from the European Stability Mechanism.
Speaking at the House Finance Committee yesterday, Georgiades said that the draft bill aims to improve and streamline the tax collection system, while international practice and experience shows that the existence of two separate taxation departments is ineffective as it requires double the number of staff.
He also argued the lack of a unified taxation department does not facilitate tax paying citizens.
All draft bills related to the new unified tax authority have to be passed by the House before the end of June.
Speaking afterwards, Georgiades stressed that the economy will only regain international trust with the implementation of the reforms and structural changes included in the revised memorandum.
Commenting on the revised text, Evroko leader Demetris Syllouris said that the agreement clearly outlines which actions must be taken by the House in order to secure the next instalment, adding that the most important aspects involve measures to increase liquidity and if possible, achieve quicker entry to the markets.