Cyprus Mail

MPs seeking to extend tax arrears payment scheme

Lawmakers will this week be voting to extend the deadline for applying for a scheme regarding the settlement of taxes in arrears.

Under the scheme, as it stands, people may choose to settle their debts by paying a single lump sum and benefit from a 95 per cent exemption from the additional financial charges imposed on them.

Alternatively, taxes in arrears can be paid in instalments. Overdue debts under €100,000 can be paid in 54 monthly instalments, whereas those exceeding €100,000 in 60 instalments. Taxpayers opting to pay in instalments benefit up to a 50 per cent reduction of penalties, such as interest, depending on the due amount.

Those wishing to settle their overdue debts through the scheme, must have filed their tax returns until 2015.

Currently, the deadline for submitting applications is October 3.

Now, MPs of the Disy and Diko have jointly tabled a bill pushing that date back three months more, to January 3.

A vote on the bill is expected at the plenum this Friday.

Disy MP Averof Neophytou urged the finance ministry and the Tax Department, once the bill is passed, to inform people of the new state of affairs, as this would impact persons who have been taken to court.

MPs heard that around 1300 cases of VAT in arrears have ended up in court, and that of these only 15 have applied for the settlement scheme.

Tax officials said that currently there are approximately 150,000 people with taxes in arrears, with 80 per cent of these concerning amounts under €30,000.

To date, since the settlement scheme was introduced, 3085 applications were submitted, of which 2341 concern lump-sum payments and 744 via instalments.

These cases concern €95 million, of which €76 million is expected to be collected by the state, with the other €19 million accounting for exemptions and discounts.

Some €55 million has actually been collected from lump-sum payments via the settlement scheme.


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