Cyprus Mail
Cyprus

MPs reject govt efforts to keep tax high on microbreweries

The owners of the Pivo microbrewery in Nicosia

THE House plenum unanimously blocked on Friday an attempt by the government to refer a bill to the supreme court as it would reduce the consumption tax on beer produced by microbreweries and would thus deprive state coffers of increased revenues.

The bill, tabled by the Greens, aimed at harmonising Cyprus law on taxing microbreweries with the rest of the European Union that would reduce the levy from €6 to €3 per 100 litres / degree of alcohol of finished product

The chairman of the House Finance committee and ruling Disy party head Averof Neophytou, called the executive not to refer the law to the supreme court.

President’s Anastasiades’ administration wanted to refer the bill on the reduced tax due to an increase in administrative costs as inspections would be needed to verify the size of breweries both domestic and from other member states from which beer is imported.

Neophytou told representatives of the Finance ministry and the Legal Service during a House finance committee meeting earlier in the day, that the referral of the law to the higher court would be a political issue, as all the laws voted have administrative costs.

Efi Xanthou of the Green Party, told the Cyprus Mail that there is a European Directive that clearly states that microbreweries are entitled to reduced tax.

“Even if Cyprus does not follow this directive, if a local microbrewery exports to an EU member state that implements the directive, then it would pay reduced taxes,” she said.

What we have to do, Xanthou continued, is to ask once a year all member states to inform Cyprus which microbreweries are entitled to a reduced consumption tax and this will be notified to the tax department.

“We, as a state, are obligated to register and certify the quantities of beer of microbreweries. If this case went to court, I’m sure it would be rejected. The four companies that are currently registered and operating in Cyprus are subjected to reduced tax when exporting abroad.”

Xanthou added that the Ministry of Agriculture has to help these businesses to be able to export.

“If the government starts rejecting law proposals because of increased administrative costs for things that they have to do anyway, the executive and legislature will not be able to do their job, as we will pass the law, and they will invoke on administrative costs,” she concluded.

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