Cyprus Mail

Consensus reached over tax tsar

By Angelos Anastasiou
Consensus was finally reached on Tuesday between the Finance Ministry and the House Finance committee on the issue of merging the Internal Revenue Department (IRD) and the Value-Added Tax Service into a single unit under a taxation tsar with a fixed-term mandate.
The bone of contention, it emerged on Monday, had been provisions in the government-sponsored bill that excluded current IRD boss Yiorgos Poufos from eligibility for the role of Taxation Commissioner, while civil servants’ union PASYDY also protested the bill as unconstitutional.
The bill must be passed by the House by Thursday as it is a prerequisite for the release of the next tranche of aid from the European Stability Mechanism (ESM) of roughly €600 million.
Following a marathon session of the Finance committee – partly behind closed doors – the controversial provisions were scrapped, making Poufos a viable candidate for the position.
It was agreed that the appointment would be made by the Council of Ministers, per the bill’s original provision, which was tweaked to require the approval of the Finance committee.
“The criteria for the appointment will be expanded to include specifically that the commissioner must have experience on taxation issues, as well as on related issues,” committee chairman Nikolas Papadopoulos said.
Despite the defeat he has had to swallow on the issue of the appointment criteria, Finance Minister Harris Georgiades said that the main point of the bill was the provision of a fixed-term mandate, which was agreed at five years – with a possible renewal for a second, and final, term.
“This is the critical provision in the bill,” he said.
But deputies were troubled by the fact that the appointment of a civil servant would be made by the Council of Ministers, instead of the Public Service Commission (PSC) as required by law.
This was addressed by Georgiades during Monday’s session, when he had noted that the PSC cannot make fixed term appointments and once again stressed that the most important feature of the bill is the limited mandate provision.
PASYDY insisted on its line of unconstitutionality, with legal advisor Alekos Markides attending the committee’s session.
“[The Commissioner] would exercise administrative power and thus cannot be appointed by a political body,” Markides said. “That would violate article 125 of the Constitution.”
His position was answered by a delegate from the government’s Law Service, who argued that such appointments by the government have been legislated in the cases of the Commissioner of Telecommunications and the Competition Protection Authority, whereas article 125 has been rendered dormant due to the law of necessity.
But Markides countered that the House gave an oath to uphold the Constitution and must vote accordingly.

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