Cyprus Mail: News Articles in English, 01-06-03

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From: The Cyprus Mail at <http://www.cyprus-mail.com/>

Sunday, June 3, 2001

CONTENTS

[01] Burns takes the lead in the Cyprus Rally

[02] Offshore firms on tax crusade

[03] UN commander's grief over Nepal massacre

[04] Jewel raid in Limassol

[05] Suspected bombers remanded

[06] News in Brief

[01] Burns takes the lead in the Cyprus Rally

FIFTY cars were left in the race when the Cyprus Rally got under way again yesterday morning in Limassol. A high rate of attrition took a heavy toll on the first Leg on Friday, with a third of the competitors out of the running after just six of the event's 22 special stages.

Less than fifteen seconds separated the top four cars, with Marcus Gronholm, Richard Burns, François Delecour and Colin McRae set for an all-out attack on the day's eight stages. Carlos Sainz was within striking distance of fifth-placed Freddy Loix, and overhauled him by setting fastest time on the first stage out, though he was still more than a minute behind team-mates Delecour and McRae. The Scot had moved into third overall, while Burns had replaced Gronholm at the top of the leader board, and now had a seven second advantage over the Finnish World Champion.

As in the first Leg, it became apparent that the front runner was losing time as his car swept the rocks from the stages, and after stage 8 Gronholm had dropped to third behind McRae, while Sainz was closing the gap on Delecour. Didier Auriol was charging hard and had moved into a points- scoring sixth place in the Peugeot, poised to attack Sainz. There were still only 13 seconds between the top four.

Fastest on two more of the morning's stages meant Sainz was now closing on those ahead, the gap down to 33 seconds by the lunchtime service halt. Auriol's rally came to an end when the Peugeot overheated. Stopping on the way to Limassol to check what was wrong, the Frenchman couldn't get the car to start again.

By the halfway halt, the difference between rally leader Burns and fourth placed Gronholm, who had been overhauled by Delecour, was still just 14 seconds, and Colin McRae was snapping at the leader's heels, a mere two seconds separating the two. “I'll wait to see what happens this afternoon” said the canny Scot, “because this rally is wide open.”

As the temperature in Limassol soared to 35 degrees, the drivers set off again to repeat the morning's loop, knowing that the stages would be much more rutted on the second run, after the passage of fifty rally cars. Tyre wear was a real worry, as the crews had to complete all four stages with the four tyres on the car and just two spares. By the last stage it would be a question of selecting the least worn of the six and running with those, trying to avoid a puncture.

Sainz continued his charge, pulling back 13 seconds on Gronholm on stage 11 and another six on stage 12, and both drivers moved up a place when Delecour's engine gave up the ghost. McRae, meanwhile, moved up to first overall, 3 seconds in front of Burns, with two stages left till the overnight halt.

Burns fought back to narrow the gap to 1.2 seconds, while Sainz again set fastest time, to start the last stage of the day eleven seconds away from a possible third place at regroup.

Tactics were all important: no-one wanted to be first on the road on the final day, and McRae had the advantage of running behind Burns, so he knew how to pace himself for a better running position on Sunday. Neither, however, could afford to let Gronholm get too close, and Sainz was perfectly poised to launch an assault on the leaders on the last day.

The Spaniard powered through stage 14 fastest, and arrived in Limassol exactly six seconds behind Gronholm, running an ideal fourth on the road on the final Leg, and just 24 seconds behind race leader Richard Burns. McRae eased off just enough on the last stage to run second on the road today, three seconds behind Burns. Running third today is reigning champion Marcus Gronholm, 15 seconds behind McRae.

With all the front runners so close and so hungry for championship points, today promises to be an exhilarating race.

The final Leg includes eight more stages over 97 kilometres to the northeast of Limassol, and the rally ends on the Limassol seafront at half past five this evening.

Copyright Cyprus Mail 2001

[02] Offshore firms on tax crusade

INTERNATIONAL businesses are on a crusade to force the government to get to grips with harmonising corporate tax between local and offshore companies in order to check rising tension over civil service foot dragging.

The government announced its intention to scrap tax advantages for 'offshore' companies more than a year ago, to avoid being blacklisted by the Organisation for Economic Co-operation and Development (OECD) as a tax haven.

Offshore companies are currently taxed at a rate of 4.25 per cent and local companies at 20 to 25 per cent.

The European Union insists that Cyprus harmonise corporate tax for local and international businesses by March 2002, and the OECD says that Cyprus must come up with a credible timetable for removing harmful tax practices by the end of December 2001.

But 12 months later, no decision has been taken, sending offshore companies - the second largest contributor to GDP after tourism, into spasms of nerves about the future.

The parliamentary elections have put everything else on the backburner this spring, and with the government working on skeleton staff in July and August, that leaves just four months to draw up a package and get it passed by the House, ready to be approved by Brussels in the new year.

To make matters worse, a linchpin in the negotiations, the Commissioner of Inland Revenue, retired last month. A lengthy tender process will have to be endured before a permanent replacement can be found.

“Why couldn't he stay on for another six or nine months? I would understand if there was a permanent replacement, but to have a tender process in this period is silly,” said Cyprus International Business Association (CIBA) President Mehran Eftekhar, adding that anxiety among international businessmen was growing by the day.

“We're under tremendous pressure,” he admitted, and for the first time made it clear that offshore companies would leave Cyprus if taxation goes over 12.5 per cent - the rate to be adopted in Ireland by 2003.

Both Brussels and the offshore community are reluctant to see the Irish model, which allows some preferential rates, implemented in Cyprus, despite talk in government circles that this might be the way forward.

CIBA also disagrees with the first of two independent reports commissioned by the government, which recommended high taxation as elsewhere in Europe - between 20 and 42.23 per cent in EU countries today.

Despite a promise from George Vassiliou at the CIBA AGM in April that Cyprus would have the lowest company tax in Europe by the end of 2001, the lack of firm commitment leaves a big question mark.

The other big fear is with holding tax - which would see the state cream off revenue from dividends, interest and royalties, as well as salaries.

Last October CIBA submitted a recommendation for a corporate tax rate of 10 per cent and a personal tax threshold of £12,000.

They also welcomed a tax package put forward by DIKO just before the parliamentary elections - with a corporate tax of 12 per cent and raising the personal tax threshold to £10,000.

Their other hope is a suggestion from the University of Vienna to lower corporate tax to 0 per cent, on the grounds that the pending hike in VAT from 8 to 15 per cent is adequate compensation for state coffers.

The report was presented to the government in February and was approved by the EU at the end of May.

“We hope we can persuade the government not to go down the Irish route and seriously consider the Vienna University option. That doesn't mean that the figures can't change. It's simple, practical and most important, it's already been approved by the EU,” said Eftekhar.

Nevertheless, the Vienna model is unlikely to appeal to the government, and Vassiliou has gone on record that if offshore companies don't want to pay any tax, then they can jump ship to the Caribbean.

The second government-commissioned report is to be unveiled on June 6, and on June 20 the Vienna team is holding a seminar at the Nicosia Hilton to discuss its proposals.

The government has often cited excellent infrastructure and advantageous location as other benefits, apart from low tax, for the large offshore community in Cyprus, but Eftekhar was adamant that taxation was the major issue.

“All factors are very important, but at the end of the day, tax is a cost. If the piece doesn't fit the jigsaw then you can't complete the puzzle,” he said.

Given that international businesses generate $300 million a year - equal to 25 per cent of the total manufacturing output -- the Cyprus economy would be hit hard by a mass exodus of offshore companies.

George Vassiliou was unavailable for comment this week and representatives from the Finance Ministry were unwilling to discuss the matter with Sunday Mail this week.

Nevertheless, CIBA still hopes the waiting game will end by this month at the latest.

Copyright Cyprus Mail 2001

[03] UN commander's grief over Nepal massacre

THE Nepalese commander of the United Nations Force in Cyprus (UNFICYP) yesterday expressed his shock and grief in learning of the tragic massacre of the royal family in Kathmandu.

The heir to the throne, Prince Dipendra, is reported to have shot dead up to 11 members of his family during a banquet in a manic shooting spree on Friday night.

King Birendra, Queen Aishwarya, their daughter Princess Shruti, youngest son Prince Nirajan, the king's sisters Princesses Shrada and Shanti and his brother-in-law Kumar Khadga all died in the murderous rampage.

The Crown Prince is thought to opened fire with a semi-automatic after a row with his family over his choice of bride, the daughter of a former government minister.

He then turned the gun on himself and is being treated for a bullet wound in hospital in Kathmandu.

The country is now in mourning for the largest slaughter of a royal family since the execution of the Romanovs during the Russian revolution.

“The force commander and his family are profoundly shocked and grieved by the tragic events in Nepal. Like all Nepalese they are deeply saddened by the news,” read a statement conveyed by UN spokesman Brian Kelly.

Major-general Victory Rana has been force commander of UN troops in Cyprus since December 1999. He is here with his wife Padma Rana. The couple have two children.

Crown Prince Dipendra's chosen bride was a member of the aristocratic Rana family, but the Sunday Mail was yesterday unable to confirm whether she is a relative of the UNFICYP commander.

Copyright Cyprus Mail 2001

[04] Jewel raid in Limassol

SOME £12,000 worth of jewellery and cash was stolen from a Limassol flat yesterday, while the owner and his family were out.

The lock was broken and the thief made off with £6,000 worth of gold jewellery, £3,000 worth of silver, and $2,000 and £1,900 in cash.

Police suspect that the criminal must have had prior knowledge that the valuables were kept inside the apartment.

Copyright Cyprus Mail 2001

[05] Suspected bombers remanded

TWO men were remanded for eight days in the Nicosia District Court yesterday, in connection with a string of bombings between September 1999 and April 2001.

Costas Hadjimarcos, 33, and Giorgos Stylianou, 38, from the Famagusta district are charged with planting bombs at a bakery in Frenaros, on the car of a police officer's wife in Ayios Pavlos, at the police compound in Omorphita, and at two private houses.

Police say Hadjimarcos was linked to the bombings by traces of DNA collected from the scenes of crime. He then named the other suspect during police questioning.

Police are looking for a third man who they think may be abroad.

Copyright Cyprus Mail 2001

[06] News in Brief

Teenager critical

Seventeen-year-old Stelios Savva was immediately rushed to Paphos hospital, but because of the severity of his injuries he was then flown by police helicopter to Nicosia where he underwent emergency surgery.

Savva was trying to overtake a car on Nicos Nicolaides Avenue at around 1.15pm when the car made a right turn and the two vehicles collided.

Tourists remanded

The 52-year-old man and his girlfriend, 26, were arrested after police were informed that the pair were allegedly peddling drugs in Limassol.

Police were tipped off by a Limassol youth who claimed that he had been approached by the couple who tried to sell him drugs.

The drug squad spotted the tourists' car and followed them back to their hotel in Paphos where they found four grams of hashish in a sports bag.

Police said the 52-year-old man allegedly admitted he was a drug user and that he had brought the hashish with him from England.

Larnaca gas blast

The explosion, thought to be a result of gas leaking from the cylinder, caused considerable damage to the kitchen of the house in Ayii Anargyri and shattered the windows of a neighbouring house.

Copyright Cyprus Mail 2001

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