Ministry opposition to tax arrears extension

The finance ministry on Monday sought to shoot down proposals brought by legislators to extend the repayment period for tax arrears, warning that doing so would set a bad precedent.

Government officials were in parliament for their input on two legislative proposals.

The first bill, drafted by Edek MP Elias Myrianthous, concerns regulations to extend the period for repaying outstanding tax dues, based on the law enacted in 2017.

Citing the financial pressures created by the coronavirus pandemic and the conflict in Ukraine, Myrianthous said there are people who did not have the means or the time to make use of the provisions of the 2017 law.

Under the second bill – co-sponsored by Elam MPs Christos Christou, Linos Papayiannis and Soteris Ioannou, as well as by independent MP Andreas Themistocleous – employers and self-employed persons would be afforded up to 120 months to pay tax arrears, in monthly installments of equal amounts.

Increasing the number of monthly installments would provide relief to people as well as boost state coffers down the line, Ioannou argued. It was important that the state exhaust all avenues to collect before going to court.

But finance ministry official Nayia Symeonidou countered that enough extensions have already been given for tax arrears. Any further extensions would create tax collection problems for the state.

Likewise an official with the Tax Commissioner said that constantly giving extensions sets a bad precedent, while also creating a sense of unfairness among those who pay their taxes on time.

He said the discussion concerns taxes outstanding from 2015 and prior – therefore enough time has been given.