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Peyia cuts deal for owed back taxes

Over €100,000 is owed by various operators in Peyia with permits, such as those with water sports facilites and sun-bed hire

By Bejay Bronwe

PEYIA MUNICIAPLITY is aiming to claw back over €1 million by the end of the year in back taxes and has cut a compromise deal with debtors, according to a local official.

Peyia councillor Linda Leblanc, who backs taking tougher action against those owing money, said that the largest chunk of outstanding taxes due to the municipality comes from local businesses, including hotels and beach operators.

She said: “Over €100,000 is owed by various operators in Peyia with permits, such as those with water sports facilites and sun-bed hire.”

Operators currently pay about €75 per bed for the year. The season is recognised as starting at the beginning of May.

Leblanc added that although the situation is a little better than last year, a number of local hotels still owe money for water bills. One hotel alone owes around €150,000 in water and overnight stay taxes. At least four cases involving a single hotel are now in court, she said.

Meanwhile, another hotel owes €75,000 and Leblanc says although they haven’t paid outstanding taxes for years, they have recently submitted an application to extend the facility.

“How can they have money to build an extension and yet they fail to pay their bills. It isn’t fair to keep building and not to pay up.”

The councillor said she was a lone voice on the eight-member council, pushing for drastic measures, but that a compromise was agreed. Less than a week ago, businesses were informed in writing that they must pay 50 per cent of their outstanding debt immediately and the rest must be covered by post-dated cheques to clear the outstanding tax obligations by the end of the year.

Leblanc said: “Some people have now come forward with payments, but a lot are trying to negotiate the 50 per cent, saying they can only pay a certain amount. The general feeling at the municipality is that some money is better than none.”

Leblanc says that for whatever reason, there seem to be lack of political will on behalf of the council to pursue these debts. By law, she noted, Peyia municipality could cut off water to those hotels owing taxes.

“I support this idea; if we do that I believe they would pay their bills the next day. But there was reluctance by the majority of the council to take this action.”

The lack of sufficient funds coming into the municipality coffers has a knock-on effect, with Peyia now owing hundreds of thousands to the water department.

“They can’t keep scamming the system like this, Peyia has to pay the water department, we have obligations and we owe money, we can’t pay if they don’t pay,” Leblanc said.

According to the councillor, local authorities’ administration and management is being scrutinised by the troika, and failures over financial correctness are being highlighted.

“As pressure is now on local communities about handling of debts and especially the beaches, the improper handling which has led to failure to collect these debts, for whatever reason, is now at the fore,” she added.

“Although this is a ridiculous situation, I am hopeful that the money will be cleared by the end of the year. Two years ago, another hotel owed a large amount of money and they kept to their payment plan.”

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