Cyprus Mail: News Articles in English, 01-11-08

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

Thursday, November 8, 2001

CONTENTS

[01] Fiscal reform 'will boost economy and attract foreign investors'

[02] Shares climb for third day in a row

[03] Pilots dismiss 'rival airline' claims

[04] Deputies seek clampdown on illegal use of Turkish properties

[05] Cyprus artefacts fetch £450,000 at auction

[06] Police seize ecstasy after car chase

[07] Cut price city breaks

[01] Fiscal reform 'will boost economy and attract foreign investors'

GOVERNMENT fiscal reforms would make Cyprus a tax heaven for foreign investors if approved, Finance minister Takis Klerides said yesterday.

The government is today due to submit its radical tax reform bill before parliament, where it will undergo examination in committee over coming weeks before being put to the vote.

The reform would shift the fiscal burden onto indirect taxation, with VAT rising from 10 to 15 per cent in line with EU requirements, while income tax would be slashed.

The minister yesterday claimed the public would back the reform because it provides for " tax breaks you have not seen since the Cyprus Republic was founded in 1960" .

Klerides expects the reduction in company taxes from the current 20-25 per cent to 10 per cent to open new horizons for economic development.

" The bill conveys the right messages to corporations in the light of the global economic recession,"he said.

Klerides said tax relief measures would be implemented in the next year, while further social benefits would come later.

Aristos Chrysostomou of DIKO, the acting chairman of the House Finance Committee, said yesterday that the bill would be examined by the Committee as soon as possible.

He said that the Committee might introduce amendments to the proposal.

Chrysostomou assured the bill would be approved by the House in the next two or three months, with or without amendments.

" Finance Minister Takis Klerides will attend our next session on Monday to go through the bill. Parties will at a later stage convene separately to position themselves on the proposal and possibly make some suggestions,"he said.

" My understanding is that all parties wish to go through the procedures without any delays and pass the bill for the good of the people,"he added.

However, opposition AKEL yesterday branded the tax reform proposal as " socially unjust" .

AKEL criticised the scheme for benefiting high-income groups out of proportion with benefits for those earning around £10,000 per year.

" Some 40 per cent of working people plus pensioners will suffer a major blow due to heavy indirect taxation, while they will not receive any benefit from the increase of the tax-free threshold from £6,000 to £9,000 because they don't make more than £6,000 a year,"an AKEL announcement said yesterday.

AKEL argued that the £88 million that the government would allocate to support low-income groups were not enough.

" At the same time, the proposal is exceptionally generous to capital holders and corporations,"the party charged.

The left wing party nevertheless pledged to join forces with the other parties "to create a modern and simplified tax system with a view to European practices which will pave the way for economic development and social justice" .

The tax reform bill, approved by the Council of Ministers on Monday, will slash income tax across the board and more than halve corporate tax for local companies, in exchange for gradual increases in VAT.

The bill must be approved before Cyprus joins the European Union, to bring VAT in line with EU requirements and harmonise tax rates for domestic and offshore companies.

If the bill is passed, corporate tax will be levied at a flat rate of 10 per cent and VAT gradually increased from the current 10 per cent to 13 then 15 per cent by the end of 2002.

The tax-free threshold would be raised from £6,000 to £9,000 and the top tax rate lowered to 28 per cent for annual income over £15,000, compared to the current 40 per cent on earnings of more than £12,000.

The shift from direct to indirect taxation will go some way to eliminating the losses caused by widespread tax evasion.

Offshore companies will lose their current preferential tax rates of 4.25 per cent, paying the same 10 per cent rate as local companies.

The proposals also include the abolition of the defence levy.

The 2 per cent levy on salaries and pensions would be abolished immediately while the 3 per cent charge on rents and dividends would be scrapped in 2003.

Road tax and import tax on vehicles will increase, but road tax for diesel saloons will decrease.

Copyright Cyprus Mail 2001

[02] Shares climb for third day in a row

SHARE prices climbed further higher yesterday, adding a total of seven per cent to the value of the all-share index over the last three trading sessions.

The general index ended 2.27 per cent up at 136.6 points on a total volume of £11.5 million. The blue chip FTSE/CySE index added a modest 0.78 per cent to close at 537.2 points and garnered almost half the day's volume.

Although trading opened on a low note, by mid session it had reached 136 points, dropping back slightly before the last half hour's bullish run.

" I think everyone was a bit surprised that the index has managed to sustain an upward trend for three consecutive days,"said one Nicosia broker.

" It's been a long time since this has happened and all we can do is hope it will continue."

One of the island's leading economists, commenting on the possible effects of the proposed new tax package, which will leave higher income groups with more in their pockets, said yesterday he didn't think the market would benefit to any great extent from the deal.

I won't say the tax package is either positive or negative. I consider it more neutral,"he said. " It is more likely to affect general consumption activity in Cyprus, so finding a connection with the stock market is stretching it a bit. The benefits might more likely be translated into imports of Mercedes cars."

The economist said that where the tax package would be really beneficial was in the collection of taxes themselves.

" It shifts the burden from direct taxation to indirect and in an economy where you have a problem with tax evasion on direct taxation it's better to move the tax in other areas where you can collect,"he said.

Only insurance stocks ended in the red yesterday, dropping 0.31 per cent while other sub sectors added gains of between 0.17 in the manufacturing sector and 7.73 per cent for fish culture companies.

Despite the gloom in the tourism sector since the September 11 terrorist attacks in the US, the tourism and hotels sub-sectors gained 3.82 per cent and 1.95 per cent respectively. Tsokkos Hotels was heavily traded, but ended the day marginally up at 27 cents after 1.7 million shares changed hands.

The banking sub-sector added only 0.52 per cent, but Bank of Cyprus and Laiki Bank topped the most active list. BoC ended the day one cent up at £1.95 and Laiki closed unchanged at £1.56. Around a million shares each were traded.

Meanwhile, the Cyprus Stock Exchange (CSE) board announced on Wednesday that it had removed IT company GlobalSoft (GLC) from the FTSE/CySE for failure to comply with blue-chip regulations. The company has been absent from trading for more than 30 days after being suspended by the Securities and Exchange Commission (SEC) pending its investigation of the company for alleged breaches of CSE regulations.

The CSE said yesterday that it had reservations about the return to the floor of GLC and New Marathon, which the SEC said on Monday could resume trading on certain conditions.

" With reference to companies that have been suspended from trading and the possibility of their conditional return to the trading floor, the CSE Council has reservations as to the legality of this act within the framework of current legislation and has thus sought a legal opinion on the matter,"a CSE announcement said.

GLC has been replaced on the FTSE/CySE index by another IT company Logicom, which yesterday added three cents to 49 cents.

Some 93 titles recorded gains yesterday compared to 23 decliners and 24 stocks which remained unchanged.

Copyright Cyprus Mail 2001

[03] Pilots dismiss 'rival airline' claims

The news emerged during a new spat between PASIPY and the company involving accusations of bad management and other issues.

Reports in the Greek press yesterday said CY had neither confirmed nor denied rumours that pilots planned to set up their own airline. A CY source told the Cyprus Mailthat it was true the airline had received such information but would not comment further.

But PASIPY spokesman George Charalambous yesterday laughed off the suggestion.

" This is news?"he said. " We are very happy that they informed us that we are about to start a company. We wish we had the money."

Although denying the possibility of forming a new airline, Charalambous did confirm that a group of pilots had earlier requested a substantial share in CY, an offer that was never taken up. He said " others"had done everything in their power to make sure it didn't happen.

Charalambous repeated the veiled accusations of bad management against the CY administration and referred to several " scandals"in the airline that he claimed had resulted in losses to the company. He did not elaborate.

CY spokesman Tassos Angelis declined to comment on either of the two reports yesterday, saying PASIPY was not dealing with the issues in the right manner.

Copyright Cyprus Mail 2001

[04] Deputies seek clampdown on illegal use of Turkish properties

THE HOUSE Refugee Committee is planning to ban non-refugees from using Turkish Cypriot property in the government-controlled areas, aiming to put a halt to the common illegal use of properties.

The Committee convened yesterday to discuss Turkish Cypriot property management in the light of the broadening scandal concerning illegal transfers of land.

Deputies on the Committee cited several cases of illegal use of property belonging to Turkish Cypriots and heard that the government was no longer in control of the situation.

A law passed in 1991 rules that Greek Cypriots can use Turkish Cypriot property only in certain cases.

" The rule allows Greek Cypriot refugees to use Turkish Cypriot houses because they don't have access to their own property. But at the same time, the law does not include strict provisions forbidding non-refugees to use such property,"Committee chairman Aristophanis Georgiou of AKEL explained.

The law in question also makes it illegal for civil servants to use Turkish Cypriot properties for profit-making purposes.

The Committee charged that many of the law's provisions were routinely breached, and therefore it had unanimously decided to push for stronger policies concerning Turkish Cypriot properties.

" We intend to use every legal means we have to make it strictly illegal for non-refugees to use Turkish Cypriot property. We also want to make sure that those who are using properties illegally stop doing so,"Georgiou said.

The Committee chairman said that those who had businesses housed in Turkish Cypriot properties would be given adequate time to move elsewhere.

Deputies asked Costas Taxidaris, the director of the Turkish Cypriot Management Department attending yesterday's meeting, to gather information about all Greek Cypriots using Turkish Cypriot properties and submit it to the Committee.

Georgiou said he suspected " some officials at the department could also be involved in these illegalities."

The Committee chairman spoke of " everyday complaints"regarding illegal use of properties.

"I receive complaints all the time about people who were entitled to use such properties in the past but not any more. Many of them have their own houses and use Turkish Cypriot properties to house their maids. Some others use them as holiday homes or stores,"Georgiou said.

Taxidaris admitted that there were many cases of illegal use of property, arguing however that they were very hard to investigate because of " a complicated legal system" .

" There are a few cases before court and they are dragging on and on,"he said.Taxidaris referred to one of those court cases as an example: " The man who uses the land in front of the Omerye Mosque in old Nicosia to run a parking place makes an illegal profit,"he said.

Georgiou said that hundreds of civil servants used Turkish Cypriot land to cultivate agricultural products, while they had no right to have private businesses.

The Committee also decided to push for the establishment of state district committees to make sure Turkish Cypriot property issues were well handled.

" The special committees will give advice to District Officers who are in charge of property management,"he said.

Copyright Cyprus Mail 2001

[05] Cyprus artefacts fetch £450,000 at auction

TV zoologist Desmond Morris's collection is thought to include some of the finest examples of Cypriot Early Bronze Age art housed abroad.

The 1,100 artefacts, which include pottery figurines of deities, naked women clutching babies, horsemen, a charioteer and a warrior, date from the 3rd-1st millennium BC.

He started the collection after a visit to the island in 1967, the same year that his book The Naked Apemade him famous.

" I walked into the Cyprus Museum in Nicosia and for the first time set eyes on the amazing objects produced 4,000 years ago by the Bronze Age inhabitants of the island,"Morris said.

There I found vessels and figurines exuding a cheerful inventiveness of such warmth and intensity that I became immediately infatuated.

" If they were religious, then it was a cosy, friendly religion, which celebrated the joy of every day existence, rather than hellfire and angry gods.

" I would have been happy to have been entombed along with these cheerful objects."

The items went on sale at Christie's Auction House in London on Tuesday, fetching a total of £444,585.

A Bronze Age grape bowl with an estimated value of £7,000 sold for £37,600.

Morris is a world-renowned zoologist, painter and author of more than 40 books.

He has appeared in eight television series. His paintings have been exhibited in London, New York, Paris, Amsterdam and Brussels.

Last year he sold a painting, which he brought 50 years ago for one shilling, at Sotheby's for £102,500.

Copyright Cyprus Mail 2001

[06] Police seize ecstasy after car chase

At 8.30pm on Tuesday night, waiting members of the Drug Squad tried to pull over a car on the old Paliometochos to Anthoupolis road. But the driver sped off with police in pursuit. During the chase, police said the person sitting in the passenger seat was seen opening the car door and throwing something out.

When police finally caught up, they found two pills believed to be the Class A drug ecstasy. Drug Squad members found an additional 14 pills along the route on which the car chase had taken place.

The three occupants of the car - aged 26, 18 and 19 and all from Nicosia district villages - were arrested.

A further four people were arrested in Larnaca on the same night in connection with possession of a beige powder believed to be heroin, police said.

Again, police had to give chafes when a car they were trailing sped off. It eventually crashed. The driver, aged 27, ran into a private garden before being caught. A packet of cigarettes and some rolling paper was found in the garden, with one of the papers containing a powder believed to be heroin.

The suspect was remanded in custody for three days yesterday. His three passengers were also initially arrested but released without charge yesterday.

Drug Squad Chief Demetrakis Iasonos said last week there was an increase in the number of locals using Class A drugs such as heroin and ecstasy, but added locating the pills among Cypriots had been difficult so far.

Copyright Cyprus Mail 2001

[07] Cut price city breaks

All prices include a return Cyprus Airways apex ticket, a double room and breakfast in a central hotel.

Extra nights can be brought from as little as £13 per person, per night.

Senior citizens can spend the weekend in Athens for £83 and others from £99 for one night and breakfast, with extra nights at £13 per person.

One-night Apex trips to Salonica start at £110 per person, and at £147 for families, bed and breakfast included. Extra nights cost £19 per person.

Inclusive packages to London start at £161 per person, with families at £211, plus bed and breakfast with extra nights at £26 per person.

Bed and breakfast is on offer at £59 in Amsterdam, £46 in Budapest, £66 in Milan, £64 in Paris, £33 in Vienna and £40 in Salzburg.

Apex tickets must be brought up to one week before intended date of departure.

For further information, travellers should contact Cyprus Airways or a reputable travel agent.

Copyright Cyprus Mail 2001

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