At a time when tax debts are a mountain, reaching € 1.5 billion and which have not yet been settled through special regulations, the tax bill will apparently remove the provision for criminalization of non-payment of tax. The Tax Department has invested heavily in this provision, which would help strengthen the state’s tax collection capacity.
There were estimates that criminalizing non-payment of tax would also be a lever of pressure on inconsistent taxpayers to comply with their obligations. At the same time, it would help increase state revenues. During yesterday’s discussion of the bill, which provides for the mandatory submission of tax returns by all taxpayers regardless of income, following reactions from the Pancyprian Bar Association and the SELK, it emerged that the issue of non-criminalization would be addressed. According to the two professional associations, the controversial article 51A concerning personal criminal liability to company executives, regardless of their fraud, is catastrophic for the service sector. In a letter, the Bar Association warned that if this provision was approved, it would be a prohibitive factor for Cypriot professionals to consent and be appointed as directors. At the same time, he argues that companies will cease to be tax residents of Cyprus and existing or new companies will be driven away en masse. He also notes that the foreign investment industry in Cyprus will be shaken, while the inflow of foreign capital and the collection of taxes by companies will be limited. The general director of SELK, Kyriakos Iordanou, proposed that the provision of criminalization of non-payment of the tax be removed from the bill. At the same time, he expressed concern about whether criminalization would contribute to the state’s tax collection capacity. The Ministry of Finance agreed to lead the plenary session to the Plenary Session without the provision for criminalization. A ministry spokesman also said those involved should submit a new proposal for the article in question. At the same time, he suggested that until September, the issue should be addressed. However, the ministry spokeswoman rang the alarm bell, warning that if the legislation is not changed, the tax debts of € 1.5 billion will never be collected. determined at some stage. The decision of the Minister is for universal criminalization “, he stressed. The majority of the members of the Commission seem to agree that the bill without criminalization should be promoted to the Plenary Session, which, as they said, will proceed to a later stage. At the same time, they called on the ministry to proceed with a new round of consultations with those in charge, so that a new text can be sent to Parliament. However, accountants and lawyers also have strong reservations about the issue of reviewing the tax return. As they claimed, there was an agreement with the Tax Commissioner for a review of tax returns for a period of up to 4 years. A position disagreed with the Ministry of Finance, which claimed that the compromise would be for two years.