Cyprus Mail
Business

Proposal floated to abolish annual company levy, state says no  

The House commerce committee on Tuesday proposed abolishing the €350 annual levy on registered companies but the finance ministry said the tax would stay as a court decision on cuts to public sector pays was expected and €50m or so it brings in was also needed for the national health scheme, Gesy.

Committee Chairman Andreas Kyprianou said the finance ministry had received some suggestions from MPs and would discuss the matter again when the Registrar of Companies has made it clear which firms were registered in Cyprus, how many were still operating, how many had been deregistered.

“We expect the minister of finance Harris Georgiades, within the context of tax reforms, to point out how we proceed with this admittedly unfair,  debilitating, and universal taxation,” he said.

A ministry spokesman said the levy did indeed create some distortion, given that it was universal and disregarded the size of the business, the number of employees, and turnover.

He said the issue was high on the government’s list of considerations.  However, he added: “We should not ignore the high cost of any abolition of this fee, which is estimated at around €48 million to €50 million per year.”

The official said the ministry was waiting for the court decision on public sector pay cuts, which could be detrimental to public finances. Cash was also needed to help pay for Gesy, he said.

The tax was introduced in 2011, to support public finances, and the current bill was put forward by the parties, Edek, Diko, Solidarity, Citizens Alliance, the Greens, Elam, and independent MP Anna Theologou.

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