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Cyprus

Akel, minister in war of words over windfall taxes

finance minister constantinos petrides
former Finance Minister Constantinos Petrides

Main-opposition party Akel lambasted Finance Minister Constantinos Petrides on Tuesday after the latter responded with a tweet to the party’s July request for a meeting to discuss the implementation of a special tax on windfall profits.

The minister’s reaction showed arrogance, the left-wing party said in a written statement, adding that they had requested a meeting on July 8.

Akel has been pressing for the taxation of windfall profits of companies, saying this will help support vulnerable groups amid price rises.

In a tweet late on Monday, Petrides responded to Akel leader Stephanos Stephanou claiming that the reduction of VAT is unconstitutional and the opposition party needs to propose constitutional tax increases.

“Akel knows how to table and vote for an (unconstitutional) VAT reduction. To increase (constitutionally) taxes by proposing a law does it not know?” the minister said.

He ended by saying “in any case, we will meet”.

Petrides and Anastasiades’ government continue to protect big interests instead of society and citizens, Akel said, explaining that the taxation of windfall profits is provided for in the European acquis and is included in the toolbox drawn up by the Commission to address the large increase in energy prices.

The same measure for the taxation of windfall profits in the production of electricity from large photovoltaic parks was recommended by the Cyprus Consumers Association earlier in August. They also said this will bring additional revenue to the state that could be used to help vulnerable groups.

The association pointed out that the president admitted there are windfall profits and that they will be taxed in an interview.

As regards VAT reduction, Akel said this is not unconstitutional citing a 2009 supreme court decision that considers it legal and within the powers of parliament.

“A decision which the government defiantly skips over to continue to collect increased revenue at the expense of the taxpaying citizen,” the party said.

In the first half of 2022 the state has increased revenues of almost €700 million compared with last year due to price inflation, Akel added.

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