President mulls next move after House votes on VAT

President Nicos Anastasiades on Friday urged patience as he awaits the attorney general’s opinion on whether bills approved by the House plenary on Thursday regarding VAT on fuel and electricity bills are constitutional.

The government is understood to be considering either sending the two new laws back to the House for reconsideration or referring them to the supreme court.

Government spokesman Marios Pelekanos said on Friday that the government will seek the attorney general’s opinion as to the constitutionality of the bills and act accordingly. He said the two decisions will cost the state more than €150 million in total, derailing the government’s fiscal policy.

According to the finance ministry, the bill abolishing VAT on the consumption tax of petroleum products until the end of the year that was proposed by Akel and voted in with 31 votes for and 15 against, will cost the state a total of €30 million.

The bill abolishing VAT on the electricity authority’s fuel adjustment clause until the end of the year, proposed by Diko and Dipa, was voted in with 31 votes for and 15 against, adding a further €45 million cost for the state to shoulder, according to the finance ministry.

Akel secretary general Stefanos Stefanou speaking at the plenary session, pointed out that because of the elevated prices, the state has increased revenues adding that “the government, seeing the increased revenue, has revised its forecasts upwards by one billion euros…Therefore, there is margin for taking this temporary measure.”

Disy MP Savvia Orphanidou countered that that taking into consideration that public finances are finite “we have to be prudent” as we do not know where the war in Ukraine will lead.

Public finances should be handled wisely and that Disy will vote against proposals that “do not contribute to the implementation of the acquis Communautaire and lead us down unwanted paths, she added.

If the AG opines that the bills are unconstitutional, the President of the Republic is set to refer them to the supreme court.

“Everything rests on the Attorney General’s opinion as the President never decides without the opinion of the state’s legal advisor on whether to turn the bill back to the house or refer it to the Supreme Court. Thus, patience must be exercised,” President Anastasiades said on Friday.