Cyprus News Agency: News in English, 11-08-12

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From: The Cyprus News Agency at <http://www.cyna.org.cy>

CONTENTS

[01] PARLIAMENT - BILLS - MEASURES

[02] INVESTIGATIVE COMMISSION - PROCEDURE

[03] QUARTERLY ACCOUNTS PUBLIC DEFICIT

[04] FINMIN FISCAL MEASURES

[01] PARLIAMENT - BILLS - MEASURES

The second bill provides for the creation of an additional taxation scale of 35% for persons with an income of 60,000 euros or more. This will give the state an additional 5 million per year and, once it becomes law, it will take effect from 2011.

The third bill provides for increasing the immovable property tax.

Specifically, owners of property, which was valued in 1980 up to 120 thousand euros, will not have to pay immovable property tax. However, owners of property in 1980 which was valued at 120,001 to 170,000 euros will be subject to 0.4% tax. Owners of property which in 1980 was valued between 170,000 to 300,000 euros will pay 0.5% tax; owners of property valued in 1980 from 300,000 to 500,000 euros will pay 0.6% tax, while those with property valued between 500,000 to 800,001 euros will pay 0.7% tax. Owners of property valued in 1980 at 800,001 or more will pay 0.8% tax.

The government estimates 24.2 million euros in income from this measure.

The fourth bill regulates pension benefits of civil servants, semi-governmental employees and local authority employees and outlines that new employees will join the Social Insurance Fund and pay same contributions as the private sector, thus abolishing pension funds.

It also provides for increasing the contribution to the widows and orphans fund from 0.75% to 2%.

The law will come into effect the first day of the second month after it is issued in the Official Gazette.

The fifth bill deals with the contribution of the gross income and pensions of public sector employees, semi-governmental employees, local authority employees and those working at school boards.

The special contribution of 3% on the gross income or pensions will be valid for three years.

It is clarified that the special contribution of 3% will be calculated on the monthly basic salary, any general pay rise or cost of living allowances, all benefits for compensation or overtime, and all flat benefits given to highly paid civil servants.

The 3% contribution concerns those working full time, part time, on an hourly basis and pensioners. It includes all officials except the President of the Republic, Ministers and members of the House of Representatives.

The overall contribution to state coffers is estimated at 90 million euros and, if the bill is passed into law, it will take effect the first day of the second month after it is published in the Official Gazette and will be valid for 36 months.

The last bill provides for an increase of VAT to 17% from 15% and it is estimated to bring an income of 160 million euros to the government funds. It will take effect from the 15th of September 2011.

The House plenary will convene in an extraordinary meeting on the 25th of August to vote on the law bills prepared to achieve fiscal consolidation. A debate on the measures will take place at the House Committee on Financial and Budgetary Affairs on the 22nd, 23rd and 24th of August.

[02] INVESTIGATIVE COMMISSION - PROCEDURE

In a press conference on Friday, lawyer Polis Polyviou, who was appointed by President of the Republic Demetris Christofias as a single-member inquiry committee, to investigate events which led to the deadly explosion, told reporters that Friday was the last day of submitting documents and his associates are in full swing so that from August 22 to 26 they will make up a list of persons who will be asked to come forward for questioning during public hearings that will start from August 29, in an effort to reach a credible conclusion by the end of September.

Polyviou said that President Christofias might be asked to answer specific questions by the commission, which intends to ask one or two ambassadors who are serving overseas or even experts. He emphasised that the commission is not a court of justice, clarifying that he will attribute political and institutional responsibilities which led to the tragedy. Polyviou underlined that he is aware of reports that minutes from meetings held at the Foreign Ministry might have been tampered with and has seen minutes that have differences, however he did not specify from which meetings these notes came from.

Polyviou said relatives of those killed during the explosion may be present with their lawyers during the public hearings and if they wish they can ask questions, but witnesses cannot be cross examined because it is not a court procedure. However, he underlined that where state secrets are in jeopardy or for other reasons, the meetings will take place behind closed doors.

[03] QUARTERLY ACCOUNTS PUBLIC DEFICIT

The latest figures of the Quarterly Accounts of General Government show that during the second quarter of 2011, the deficit stood at 315.8 million euros, compared to 326 million in the corresponding period of 2010.

In comparison to the first quarter of 2010, state expenditure for the period April-June 2011 rose by 2.5% concerning compensation of employees, operational expenses declined by 2.1%, while social transfers went up by 1.6%. Moreover, state revenue from current taxes on income and wealth rose by 24.3%, from taxes on production up by 3.1%, of which VAT revenue rose by 2.1%, while social contributions revenue declined by 2.4%.

Total state revenue amounted to 1 billion 655.6 million euros, marking a 4.2% increase compared to the corresponding period of 2010, while total expenditure reached 1 billion 971.4 million, increased by 3%.

[04] FINMIN FISCAL MEASURES

In a press release issued after the downgrading of the Cyprus` credit rating from A- to BBB by Fitch on Wednesday, the Ministry states that the government is doing everything necessary in order to proceed immediately and effectively with the necessary structural and fiscal measures, in close cooperation with political parties and social partners.

Cyprus finances were exacerbated, following a deadly blast of containers full with ammunition, at the Evangelos Florakis naval base, near Limassol, on July 11th.

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