DISY leader and MP Averof Neophytou on Thursday tabled a bill proposing the lashing of Immovable Property Tax (IPT) by 75 per cent for 2016, and scrapping the tax altogether as of next year.
The DISY chief on Thursday delivered on his earlier promise to table bills for restructuring and eventually abolishing IPT as well as prescribing ways in which the state can cut spending to cover the resultant lost revenues.
Of the three bills submitted by Neophytou, the first calls for reducing the payable IPT, calculated in 1980s prices, by 75 per cent for this year.
According to an explanatory memo accompanying the bill, this meant that assuming last year a person had to pay €100 in IPT and actually paid €80 (due to the 20 per cent discount), in 2016 he or she would pay €25.
On Friday, Neophytou will unveil detailed proposals for spending cuts in the public sector which, if adopted by the House plenum, would allow IPT to be scrapped in 2017.
The savings would be generated, among others, by extending the pensionable age of MPs and government ministers from 60 to 65.
This is provided for in the second bill tabled by Neophytou. And under another of the bill’s provisions, an MP or a minister of pensionable age who goes on to become an MEP, will start receiving their MP’s or minister’s pension only once their term as MEP has lapsed.
Under a third bill, relating to multiple pensions in the public sector, any official or pensioner appointed to a position or office, after the bill has been enacted and has entered into force, will receive their monthly pension and at the same time, for as long as they serve in that position or office, will receive a salary but one that is less than the salary designated for that position.
This is to ensure that the sum of the current wages and the monthly pension, do not exceed the monthly wages that would have otherwise been paid under normal circumstances.
A joint session of the House finance and interior affairs committees is scheduled for Friday. Opposition parties have come up with their own proposals for a new IPT regime, centring on a progressive tax.
The government had proposed introducing a flat IPT rate of 0.05 per cent and doing away with the IPT paid to local authorities altogether.
Under the government bill, the flat rate would be levied on property values updated in 2013. To date, IPT is calculated on 1980s values, excluding many properties because they did not exist at the time. Rates differ depending on the value.
IPT revenues will be used to fund local authorities which stand to lose considerable income by the decision to scrap their IPT.
According to the finance ministry, owners of immovable property worth up to €50,000 would not be required to pay any tax.
But opposition parties argue that a flat rate benefits large landowners and the wealthy.