Finance minister warns parties to stay out of tax policy

Those who comment on the government’s tax reform policy should “weigh all the data”, Finance Minister Makis Keravnos said on Sunday.

He said that while the views of the parties are respected, those of the IMF, the European Stability Mechanism, which has lent us billions and which we have started to repay from this year, must also be taken on board.

“Therefore, those who are thinking about this issue should weigh all the data, because we are a member state of the European Union, we are evaluated by the institutions of the European Union and we must operate within the European framework,” he said in an interview with Philenews on Sunday.

He was commenting on proposals by Akel to make a second attempt to tax the banks’ super profits, while Elam has submitted a proposal to increase the banks’ special tax.

“In addition, the European Central Bank, which supervises our systemic banks, i.e. the three big banks that we have, has also taken a negative position on this issue. And all this cannot be accidental,” he added.

Cyprus is one of the few countries in the European Union that continue to tax the banking system twice, taxing profits and super profits and with a percentage on deposits, she said.

The robustness of Cyprus banks also only goes so far, he said.

Only recently have Cyprus banks reduced problem loans from their balance sheets and their capital adequacy is currently in good shape.

However, he said there is a need for additional provisions and, for some banks, even a need for additional capital adequacy. “All this should not escape attention when tabling any proposal,” Keravnos said.

The tax reform, he said, reaches the vast majority of citizens.

He said with the increase of the tax free earnings limit to €22,000, most of the low-paid will not be taxed at all.

Regarding pension reform, he said the primary goal is to increase low pensions.