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Cyprus tax receipts continue to fall

Capital Gains Tax receipts in Cyprus, Stamp Duty and Immovable Property Tax continue to fall as a result of the on-going slump in the real estate market.

THE COLLAPSE of property sales is having a dramatic impact on Cyprus government revenues. Compared to the first five months of last year, Capital Gains Tax receipts have fallen by €117 million, Stamp Duty receipts by €12 million and Immovable Property Tax receipts by €214,000.

Overall, Inland Revenue collections have fallen by more than €69 million Euros – a drop of 11% compared to last year.

Cyprus Inland Revenue Department collections January - May 2009

Cyprus Inland Revenue Department collections January - May 2009

Finance Ministry plans to increase the flow of revenue into state coffers include a planning amnesty. This will allow property developers (and others who have contravened town planning regulations) to pay to have those contraventions ‘regularised’ – and will enable the process of issuing Title Deeds for the properties concerned to continue.

Exactly how much revenue the state will be able to collect as a result of this amnesty is unclear. (The amnesty will not help those who are unable to get their Title Deeds due to property developers having mortgaged the land on which their homes are built).

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