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Moves to extend tax instalment payment plan

The House finance committee is leaning towards extending a scheme that enables taxpayers to pay outstanding taxes in instalments, despite reservations voiced by the tax office, the Cyprus News Agency reported on Monday.

It said that the committee had discussed a bill submitted by its president, Diko MP Christiana Erotocritou to increase from five to 10 the number of instalments taxpayers can miss in paying outstanding taxes under the scheme. The bill appears to enjoy majority support and is expected to be sent to the plenary soon, it added.

A finance ministry official told the committee the ministry agreed with increasing the number of instalments but not with extending the scheme beyond 2015 to 2019.

Initially introduced in the wake of the 2013 financial crisis to help tax collection, the scheme offered taxpayers discounts on interest and penalties to pay outstanding sums in monthly instalments. Payment had to be made in 54 instalments. Taxpayers who failed to make five such payments were ejected from the scheme.

A tax official told MPs that outstanding taxes for 2015 to 2019 were created before the coronavirus pandemic, so non-payment could not be attributed to Covid. He added that those who miss their payments are given a couple of months to cover the delay.

Disy president Averof Neophytou questioned how a taxpayer who could not meet the payment schedule in 2017 or 2018 would be able to do so in 2020 in the midst of the pandemic and with businesses closed because of the decrees to contain the spread of the coronavirus.

He said the bill could be targeted so as to exclude supermarkets, pharmaceutical companies and labs that carry out covid tests.

And he noted that the labour ministry had made a similar arrangement for outstanding dues to the social insurance fund for 2020. “Do we have two governments, because as a governing party we should be told,” he said.

Erotocritou noted that even if taxpayers wanted to pay their dues, payment periods were close to the pandemic, affecting their ability to pay. She said the state should facilitate taxpayers comply with their obligations.

“We are convinced that in this way we are boosting tax collection, particularly if one takes into consideration that according to the tax office there is €1.5 billion in outstanding taxes, while the department has collected half a billion euro with the instalments,” she said.

Akel MP Andreas Kafkalias said his party leaned in the same direction but said that care should be taken not to reward all those who could have paid and did not.

 

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