The inability of the state to collect unpaid fines and taxes exceeding 150 million euro, tax evasion, debt ridden municipalities, overpriced medicines and the fact that the Auditor’s Office is understaffed were issues raised during a meeting on Tuesday of the House Committee on Development Plans and Public Expenditure Control.
The Committee, which examined the Auditor General’s Report for 2012, heard that the 150 m. seems to be a permanent number despite decisions taken during a discussion on this issue at the Committee providing for measures to help collect unpaid taxes.
Chairman of the Committee George Georgiou said that these taxes have been due for years and will only increase as a result of the economic crisis the country is facing.
Tax evasion, he added, is a huge issue, noting that political decisions need to be taken by the Executive and the House has great responsibilities in efforts to address the matter.
Georgiou also said that another issue that needs to be addressed is the overpricing of medicines as Cyprus ranks sixth in the list of EU countries with the highest cost of medicine.
The worsening of the finances of the 39 municipalities on the island is also worrying members of the House. According to Georgiou, the Finance Ministry is on red alert after an Austrian bank which had lent a total 100 million euro to 15 municipalities has demanded its money back.
On March 25, 2013 Cyprus and the Troika (European Commission, European Central Bank, International Monetary Fund) agreed on a €10 billion financial assistance which featured an unprecedented haircut on uninsured deposits in a bid to recapitalize the Bank of Cyprus, the island`s largest lender. The bail-in also provided that Cyprus Popular Bank, the island`s second largest bank would be wound down with its good part absorbed by the Bank of Cyprus.
