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MoF: Property tax not to be reduced

22/05/2015 13:10
It is out of the question at this stage to reduce the property tax, Finance Minister Haris Georgiades told StockWatch on Friday, after statements made by executives of the ruling party.

Mr. Georgiades did not rule out the possibility of any tax relief in the future, citing the reference of President Nicos Anastasiades at the general meeting of OEB, for reducing the tax burdens.

However, he reiterated that at this stage the government will not decide to reduce the property tax.

The government is trying to change the way properties are taxed for a third consecutive year, consolidating the taxes paid to the central government (property tax) and the local authorities (municipal duties).

In 2014 the government received €100 mn from the property tax. Yesterday it was said in parliament that the revenues of the municipal authorities from duties reach €14 mn.

Interior Minister Socrates Hassikos, who spoke on the state radio this morning, asked if the offset of the two taxes, property tax and the relevant fee paid to municipalities, could mean a reduction of the total tax for citizens, left the possibility open.

“The intention to reduce the property tax is given, but I cannot answer whether this could be done this year”, Mr. Hassikos said.

The finance ministry, he added, will reevaluate the state's finances and if there is a rationale for a reduction of the property tax, this will be done.

The interior minister said that the real estate valuations carried out by the Land Registry will be completed in June.

DISY MP Andreas Kyprianou, who also spoke on state radio, citing official information, said the government is considering reducing the property tax.

The finance minister noted that the government's goal is the inflow of approximately €100 mn to the state coffers, an amount which was collected last year as revenue from the property tax, and assured the affected citizens will not be further burdened for 2015.

The actual austerity, he said, is to increase taxes and the government does not intend to adopt such a tactic.

“On the other hand”, he added, “through fiscal consolidation and reduction of public expenditure we want to create conditions that will allow us to examine the possibility of reducing the tax burdens”, he said.

As for the general revenue of the municipalities from the property tax, they amount to approximately €14 mn, he said. “The government has no intention to receive more than this”, he added.

To this end, he concluded, the technocratic groups of the Ministry of Finance will work so that the offset does not allow any additional tax burden to the citizens.