Finance Minister Harris Georgiades said that his ministry and the ministry of interior are prepared to engage in a dialogue with the parliament on redrafting the law on sewerage fees enacted this year which meant a sudden increase in the burden for certain property owners.
Georgiades who was commenting on state-radio CyBC on Tuesday said both ministries were ready “to cooperate with the parliament for a correction,” which could be in the form of a 10 per cent cap in the increase of taxation fees for each property owner.
While the new charges “were not arbitrarily imposed,” Georgiades continued, “if it comes to sudden, disproportionally large increases in sewerage fees, it is also the government’s opinion that a correction is required”.
The director general of the Nicosia Sewerage Board Savvas Hadjineocleous said that while he respected the minister’s position, implementation of his proposal could cause a shortfall in the budgets of boards which will have to be covered from elsewhere.
As a result of the new law which takes into account 2013 property values instead those of 1980 which were the basis for the sewerage fees until last year, the bill issued by local sewerage boards to some property owners increased up to ten times compared to last year.
“If we impose a 10 per cent cap for someone who paid last year €50 and will have to pay this year €55 instead of €500, in accordance with the taxation, this means that some else will have to foot the bill for the remaining €445,” Hadjineocleous said.
The Nicosia board, he added, which had €16.1m in revenue last year to cover €20m in capital expenditure, refrained from increasing its fees as it expected to benefit from €5m under the new law.
In addition, Georgiades’s proposal “conflicts with legislation and may result to inequalities, which existed before and were eliminated with the 2017 taxation,” the head of the Nicosia Sewerage board said.
As the law stands, all property owners will have to pay their sewerage fees based on the actual values of their properties which may mean a considerable decrease of the burden in the cases for some group of property owners, he continued.
“Some 40 per cent of properties had their value not updated over the past 33 years and farmland was turned into residential, residential blocks were developed and never re-evaluated and we have come to correct this distortion in 2017,” Hadjineocleous said. “All citizens were put on the same basis. Some paid a lot until last year and some paid nothing”.
Georgiades, appointed in April 2013 at the helm of the ministry by President Nicos Anastasiades -who is likely to run for re-election next year-, oversaw the consolidation of public finances following the fiscal and banking crisis of 2013 without resorting to tax increases. The government’s policy aims at reducing the tax burden to citizens, he said.