Cyprus Mail

Nicosia mayor defends staff, but will allow investigations

By Evie Andreou

NICOSIA Mayor Constantinos Yiorkadjis defended his staff yesterday, despite growing revelations in the local press that some of them are corrupt, but accepted the criticism and said all allegations would now be investigated.

“I want to believe that the deductions were given in accordance to procedures,” Yiorkadjis said following revelations by Interior minister Socratis Hasikos earlier this week that a municipal employee was arbitrarily dishing out tax cuts.

After the revelations on the state broadcaster on Wednesday, the municipality announced that Yiorkadjis called Auditor-general Odysseas Michaelides asking him to investigate the case and placed guards in front of the room where tax records were kept, until the documents were picked up by officials from the Auditor-general’s office.

The daily Phileleftheros added to the fracas when it reported yesterday that the tax cuts and write-offs to individuals and businesses were the work of not one person but a group of employees and municipal councillors for at least 15 years.

According to the newspaper, some have never paid the business tax because their business addresses are registered as residences. It added that a public company only started paying business tax as late as 2011, a mere €450 a year, even though the tax for public companies is set at €5,100.

The daily also referred to a construction company with a significant number of real estate in the capital, that has been paying immovable property tax since 2001, but it wasn’t until 2004 that it paid business tax with a €500 reduction. With exception of two years when it paid the indicated tax of €1,452, it received deductions of 35 to 70 per cent in recent years.

After the report, the municipality, that had initially expressed its satisfaction that the Auditor general’s office responded to their request to investigate the report of the crooked employee, announced that it would also look into these new cases.

The municipality tried to deflect responsibility for the absence of checks and balances by saying in a statement that it acted promptly, but expressed dismay at not being formally informed by the ministry, which “proves the ineffectiveness of the central state”.

“For three days now, there had been this report but it has not been officially submitted to the municipality so that we too can proceed with an internal review,” Yiorkadjis told CyBC.

Hasikos responded by saying that the evidence is not just an invoice, but bags full of documents which he sent to the Auditor-general with a letter asking him to investigate unauthorised tax deductions or deletions owed to local authorities.

“I cannot understand why my friend the mayor is taking this matter personally as if he was the accused,” Hasikos said in response to the municipality’s announcement.

He added that the system allows municipal employees to act arbitrarily and allow tax cuts and deletions and that this is probably true for all municipalities.

The minister also said that it was the responsibility of the state to check them, but did not.

“It is an opportunity for the government as well as the municipalities to do their job better,” he said.

Whether tax deductions over €256 must be approved by district officers is also being contested by Hasikos and the municipalities.

“They should ask for permission for any deductions over €256, as required by law,” he said.

Yiorkadjis said that for decades the municipality, like all local authorities, have been dealing with objections either for business establishment taxation or garbage collection tax and making corrections.

“And it is not reprehensible. The problem would be if an employee arbitrarily, without taking into consideration the criteria, proceeds with this kind of deduction,” he said.

The municipality said in the announcement that even the interior ministry admitted that the procedure of examining objections for taxes is within the municipalities’ remit in a letter addressed to the Polis Chrysochous municipality last year.

Commenting on the Hasiko letter sent to district officers on Thursday asking them to investigate all municipalities to see of any debts had been written off without their consent, the Union of Municipalities (UCM) said in an announcement that they only have to ask permission for erasing overdue debts exceeding €256.

When it comes to deductions, the union said, it lies within their own competence, based on criteria set by each municipality.

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