Cyprus Mail

Government considering taxing civil servants retirement bonus

Finance minister Harris Georgiades on Tuesday confirmed rumours that the government is considering taxing the lump-sum retirement benefit received by all employees in the broader public sector.
Georgiades said the issue is being examined as part of the Troika-imposed economic adjustment programme.
“The issue is being considered from the perspective of ironing out existing distortions of public service reform issues, and of fiscal sustainability,” he said. “All possibilities are on the table, but no decision has been made yet.”
The finance minister acknowledged that the government considers full tax exemption of the lump-sum benefit “a certain issue.”
“However, the intention is not to simply levy a tax on it or include it in the tax rates,” he added.
He tried to pre-empt concern over the government’s plans by assuring public-sector employees that no radical measures will be taken.
“The discussion over public finances and the budget will soon be opened, and any decision on this issue will be measured and reasonable,” Georgiades said.
But his assurances were little consolation to socialist party EDEK, which issued a statement accusing Georgiades of employing a strategy of scaremongering.
“One wonders how Mr Georgiades, who has been parading in the media since [Monday] night, has managed to upset every citizen category in just a few hours,” the socialists said. “Leading things to an impasse and then claiming to have been vindicated is not politics.”
“Politics is negotiating in favour of the public interest, and achieving the best possible result,” the statement concluded.
Employee union PEO – an affiliate of communist AKEL – called on employees to resist the government’s assault on employee privileges.
“Once again, the government overtakes the Troika in both philosophy and action, announcing a new assault on employees’ benefits and forgetting its ‘commitments’ that there will be no more cuts,” the union said. “Once again, the government announces measures without prior dialogue, confirming that it has consciously abolished labour relations.”
“We call on employees to unity and reaction so that unilateral decisions that repeatedly hurt their standard of living can be ended,” the statement concluded.

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