Insider Economy Concern over proposed unannounced Tax Department raids

Concern over proposed unannounced Tax Department raids

Political parties and professional bodies in Cyprus agree that strengthening the legal framework for tackling tax evasion is a must.

Nonetheless, they are highly concerned over proposals included in a draft seeking to combat tax evasion now being debated in the House Finance Committee, Phileleftheros reports.

The Department of Tax proposes five plus one amendments that will contribute towards compliance. For a start the draft bill provides that everyone who earns an income – no matter how low – must file a tax return. In fact, the Department will send out a relevant notification to this effect.

In addition, tax officers will be allowed to carry out unannounced raids at businesses as well as where freelancers work. At the same time, taxpayers will be able to submit a revised tax return only within a specific time-frame.

Because, as Tax Commissioner Yiannis Tsangaris admitted before the Committee on Monday, this practice is currently out of control with taxpayers filing revised tax returns wherever and whenever they so wish.

The draft bill also provides no returns to tax taxpayers who do not comply with the VAT law. Moreover, non-payment of tax becomes a criminal offence.

As for all retail and service businesses, these will be required to install special machines to accept credit card payments. The Department has already drafted a decree clarifying which companies will be excluded from this provision.

A representative of The Institute of Certified Public Accountants of Cyprus (SELK) was the first to express concerns over the proposed amendments, especially when it comes to unannounced raids and the criminalisation of failing to pay tax.

The SELK representative asked for details on what the Tax Department would exactly do during the unannounced audits. And he wondered whether the tax officers would check tax returns that are to be submitted 15 months later.

Opposition left-wing Akel MP Aristos Damianou asked how the Department would conduct checks on lawyers, adding that in the case of exceptions there would be no equal treatment for all.

Ruling right-wing Disy MP Onoufrios Koullas said the bill included measures that, when implemented, would help significantly towards the reduction of tax evasion.

And centre Diko MP Angelos Votsis, who is also committee chairman, said the Department should be given all possible weapons to combat tax evasion.

However, Solidarity Movement MP Michalis Giorgallas said the bill would make the Tax Commissioner the ultimate tax lord. But Tsangaris responded that Cyprus is the last EU member state that has not adopted these measures.

 

Read more:

https://in-cyprus.com/cyprus-to-make-representations-to-oecd-over-its-investment-programme/

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