Cyprus Mail
Cyprus Featured

Government seeks to bolster tax collection ability (Updated)

The cabinet on Wednesday approved a bill aimed at bolstering the state’s tax collecting ability, including a provision mandating the submission of tax returns by anyone with an income.

“The cabinet has approved an important amendment bill, which bolsters the state’s tax collecting ability, and reinforces the capability of exercising effective tax scrutiny,” Finance Minister Harris Georgiades said afterwards.

The bill provides that everyone with an income must file a tax return irrespective of whether this is below the €19,500 tax-free threshold, Georgiades said.

He said this would only take people a few minutes and would give authorities a better picture of the tax base and expose those who evade.

The bill also mandates that all businesses selling services or products would have to accept bank cards. It will not, however, force consumers to pay with a card.

“It is not of course the consumer’s obligation to pay with a card but if the consumer wants to use a card then it would be the obligation of the business to accept a card,” Georgiades said. “This measure too, which we think will encourage electronic payments, will bolster tax checks.”

Introducing electronic payments as a mandatory requirement had been mooted a couple of times in the past two years as was the obligation to file a tax return by everyone.

In 2017, Georgiades said the government was still losing large sums of tax revenue to undeclared economic activity by smaller taxpayers, including everything from souvlaki shops to private doctors.

At present, many private doctors, dentists and other service providers will not accept credit or debit card payments.

He said that by making compulsory the presence and use of credit card machines at this type of establishments, it would also be serving consumers.

The new legislation that was approved on Wednesday would also make the failure to pay income tax a criminal offence, in line with VAT provisions.

One more issue the authorities would need to resolve is the apparent lack of cross referencing between VAT and internal revenue service, despite this now being under one roof.

According to the auditor-general previously, checks in various classes of taxpayers using data from the tax department, showed a substantial turnover that was not declared to the inland revenue but was declared to VAT.

“Also, it was determined in some cases that the turnover declared to VAT was much higher than the turnover declared to the inland revenue department,” the auditor said.

The bill will now go to the House of Representatives.

Related Posts

Man jailed for drug driving

Staff Reporter

Interior minister pressured over Pournara, Chlorakas

Elias Hazou

Greek Cypriots accused of ignoring Turkish Cypriot offer over gas

Antigoni Pitta

Coronavirus: three deaths, 2,918 new infections (Revised)

Gina Agapiou

Concerts bring violin, piano and cello sounds to Markideio Theatre

Eleni Philippou

Coronavirus: ‘Test to stay’ in schools to be introduced as optional measure

Gina Agapiou