The team will list 100-200 big debtors - most of them are property developers evading both property tax as well as VAT. “At the same time the finance ministry presented to a ministerial-level committee a final draft bill on the creation of a single tax authority. This is part of structural changes aimed at streamlining public administration and it will go before the Cabinet for approval within days,” Georgiades told state radio. “A lot has been said about the weakness of the state to collect taxes and to combat tax evasion. That is why the government is moving towards the complete restructuring of tax departments. A single tax authority will be more effective and it will simplify procedures, optimise IT systems and minimise operational costs,” he added.

The Minister’s response came after leaked reports show big names in property development such as ARISTO and PAFILIA and others in hotel ownership owing millions in unpaid tax. Nonetheless, terms of the international bailout Cyprus signed in March stipulate that the government should “reform the revenue administration with the objective to reinforce the efficiency and effectiveness of revenue collection capacity and the fight against tax fraud and evasion, with a view to increasing fiscal revenue.” This entails integrating the VAT servicewith the Inland Revenue Department and strengthening the legal framework. An IMF team has already provided the finance ministry with technical support and know-how.

Short-term proposed measures include enacting legislation to enhance tax collection and voluntary compliance by attributing personal responsibility for payment of company taxes. Tax authorities will have the authority to seize corporate assets and prohibit use of assets, including property and bank accounts.

Source: InCyprus