ON THURSDAY, members of the Cyprus Employers and Industrialists’ Federation (OEV) and the Cyprus Chamber of Commerce and Industry (KEVE) took to the streets to protest against new VAT regulations, which they say are threatening the future of the construction sector.
Representing 13 associations in the industry, the protesters, who decamped outside parliament, said they were forced to demonstrate, after their initial response fell on deaf ears.
Contractors are up in arms over the new law, which saw the authorities scrap the VAT contractors used to charge buyers, but not the VAT they had to pay on supplies. They say delays in being paid their tax returns has resulted in serious liquidity problems.
The protesters handed over a resolution to House President Yiannakis Omirou, calling for the new law – passed in March – to be rescinded.
Some of the banners at yesterday’s protest read: ‘You are destroying businesses and harming families’ and ‘New VAT law equals unemployment and bankruptcy’.
In two announcements earlier this month, the VAT Service said it completely disagreed with the associations’ reactions, insisting that the new regulations aimed at combating tax evasion and helping the economy grow.
“The VAT Service has already notified the EU VAT Committee about the measure,” it said. “So it would show great inefficiency if we withdraw the measure, without even giving its implementation a chance.”
Regarding late tax returns payments, the service said that as long as those affected comply with the law, the return of credit would be carried out “within a reasonable amount of time and without delays”.
The service rejected claims by businesses that liquidity was being affected. “VAT was not designed to reinforce the liquidity of businesses and businesses cannot consider the tax as part of their operating capital,” it said.