The Treasury’s Financial Report last year presented different annual arrears from those appearing in reports prepared by various government departments and services, according to the 2018 Annual Report by the Auditor General’s Office.
The Auditor General’s report which was released on Tuesday also identified deficiencies, gaps and incorrect data on state revenue arrears, some of which has already been paid off. This means that the true picture of the government’s revenue arrears included in the Financial Report issued by the Treasury is nowhere to be found.
As it stands, the Treasury report shows arrears to be €2.6 billion, of which 76% (€2 billion) concern the Department of Tax.
Auditor General Odysseas Michaelides noted that the way administrative fines have been handled is not clear. The Tax service notes that fines of €6.5m concerning the Immigration Department and that of the Ministry of Energy, although included in their reports, they seem not to have been incorporated in that of the Treasury.
The Audit Office carried out a sample audit but this failed to clarify how the cases of administrative fines were handled.
The Auditor General proposed that all due administrative fines for which the repayment date expired on December 31 should be included as arrears. In addition, reports by the Ministry of Labour identify that due debts were the outcome of overpayments of social benefits which, nonetheless, are included as arrears in the Treasury’s Financial Report.
In another case, even though the Registrar of Companies noted that it had no arrears, it was later discovered that it had an outstanding debt of €211.9 million from annual fees not paid by companies as regards the years 2012-2018.
The Registrar of Companies argued that these debts concerned companies which had applied for write-offs, but the procedure was terminated following objections by the Tax Department. Also, it included companies with no data as they were registered before the Turkish Invasion of 1974 and had their headquarters in the occupied areas.
By law, these companies are exempted from paying annual fees.