THIS COLUMN, on countless occasions in the past, has expressed the view that President Christofias and his people were incompetent, irresponsible and dangerous for Cyprus. Now, I am convinced that they are politically sick. Their paranoid actions, which we are witnessing daily, have as a source an incurable ideological disease.
The bill for the immovable property tax (IPT) proved emphatically that they are ruthless when they want to put into practice some of their idiotic, ideological prejudices. No argument or rational explanation could stop them; not even the awareness of the harm they would ultimately cause. All they care about is the satisfaction that they acted in accordance with their antiquated ideological beliefs.
They seized the opportunity provided by the bailout to avenge the rejection by the legislature in 2011 of a bill with the same aim – taxation of immovable property. They never accepted that the majority of the legislature prevented them from imposing this so-called ‘taxation of wealth’. So they decided to do it now, ensuring the provisions of the bill were much harsher.
So while the troika initially proposed that Cyprus should raise €20 million in property tax, the government offered to raise that revenue to €69 million. But subsequently the government drafted a bill that – if it could be implemented and property owners paid their tax dues – would have raised, according to some calculations, €200 million. I think that the amount would have been even higher as hotels would have had to pay astronomical amounts of between €200,000 to half a million euros.
The most interesting aspect of this case was the procedure followed by the government. As has been revealed, the land surveys department was not consulted. And according to information, the technocrats of the finance ministry had no involvement in the preparation of the bill. Unbelievable as it may sound, this monstrosity was created by Commerce Minister Neoclis Sylikiotis and Labour Minister Sotiroulla Charalambous in co-operation with the presidential palace.
If this is the case, it would rank as one of the most disgraceful political acts ever perpetrated in Cyprus. This version is supported by the logic that only sick minds could have mustered the ruthlessness and irresponsibility to put together such an abomination. Because, apart from causing big problems for individuals, the IPT would have worked like a mega-ton bomb that would have blown the Cyprus economy to bits. The property and construction sector is in a big mess, but increasing taxation on immovable property 10-fold now, would be the final nail in the sector’s coffin.
Tourism is the only sector of the economy that has been doing well in the last two years. A responsible government would have done everything in its power to help it as it was the only sector of the economy with real growth prospects. It would have taken measures that would have contributed to the lowering of costs so that the sector would be able to compete with other destinations, expand and create new jobs. Instead of this, the government chose to demolish it, by putting the IPT bomb in its foundations.
When the government decides to impose a tax of 300 and 400 thousand euros on a hotel that until last year was paying 50 to 60 thousand euro what would it achieve other the complete destruction of the tourist industry? Don’t you have to be sick in the mind to try to destroying the only flourishing sector of an economy in deep recession?
On September 2 of this year, referring to Christofias and his associates in this column, I had written the following: “These people are dangerous. They will cause more catastrophes before they leave.” It is exactly what they are doing now. Nothing will be left standing by the time he leaves office.
Christofias and his gang of Marxist incompetents should never have been elected by any right thinking electorate and the people of Cyprus have to accept the responsibility for what they did. Now Christofias is more concerned with avoiding the blame for the banking and state financial debacles than about fixing the problems. Those who think things can’t get any worse could be in for shock.
@Robert Bate. Of course the use of offshore gas revenues to offset the national debt has been thought about. Catastrofias and his gang put that about as one of their earliest propaganda pieces when the crisis was developing. ‘Now that we have all that offshore gas, we won’t really need a bailout but even if we do the Troika and/or the Russians will just have to lend us any amount we want simply because of all that offshore gas lolly’.
Hmmm. The problem is that Cyprus does NOT yet have that offshore gas revenue. Indeed, it is still not certain (given the time it takes to undertake all the drilling evaluation) what the true viable amount is. Further, even assuming it is viable, it will take another 7-10 years before production starts and the government can receive revenues. In other words, as of today gas revenues are still virtual and futuristic whereas the government’s debt is real and at crisis point now.
Not surprisingly, therefore, the Troika would not allow the estimates of future gas revenues to be used to offset what the government ACTUALLY NEEDS TODAY. What the Troika have agreed in principle is that, if and when offshore gas revenues do arrive, they can be used to service the bailout loan debt. This is a basic prudent approach that any competent lender would adopt.
As anyone not yet thought of using the new found wealth of offshore gas to offset the national debt, instead fleecing the citizens of there life savings to pay for bad choices made by the government;
Even our South African Banks foresaw a few years ago that the markets could never be sustained and so stayed mostly clear of what was going on at the time.
Unfortunately we don’t have leaders in politics who can lead, so despite all the natural resources this country is endowed with its all going to simple greed and corruption (including the Chinese) and nothing has changed for most of the poor since the change of government 20 yrs ago!
Its a case of George Orwell’s Animal Farm, that’s been repeated so many times in the history of the human race, everybody’s equal but some are more equal than others.
I would love to retire in the beautiful country of Cyprus but it seems that like SA there’s no direction and just chaotic bureaucracy from what I’m reading in your local news;
A good start for Cyprus to emerge stronger than ever in its history would be to set up a truth and reconciliation commission with the north; to set the scene for a whole new beginning, it may upset a few people who still hold grudges but so what, its 40yrs on and one must forgive and move on.
Mandela had every reason to start a bloodbath after 30 yrs in incarceration but he chose wisely to forgive and move on!!
(They may say I’m a dreamer but I’m not the only one!) Robert Durban SA
It would be nice if politicians in all countries could have some experience of running a business before being elected into office. Most of them could not run a raffle. They are only good at talking with little common sense. I have become very despairing of our politicians in England, once a thriving country left struggling like the rest of Europe. I am afraid that Cyprus has the same government lacking any business sense. It really is quite alarming, where are we all heading?
John Harrison
When and if a new government is voted in to power next year, effectively (Putin) out the old one. Would they be able to reverse the destructive decisions that have been made or are they binding? I’m inclined to think that the new government will be frightened to make any real changes, as no matter who gets in those that pulls the strings will try and stop them.
It would be terrible if the country were to go into civil unrest as a result of all this greed and bungling.
Peter – maybe the ex-pats should boycott this?
My view is that the collusive ‘Troika’ consisting of ‘Gordian Knot’ Silicosis, Sotiroulla and Catastrofias know exactly what they are doing, and I also believe that they are fully aware that thousands of immovable properties have, both historically and currently, been excluded from paying the correct IPT and Title Deed transfer taxes whilst they are attempting to make the rest of us pay up even more.
So much for ‘We’re all in this together’ and the preservation of ‘Social Cohesion’.
As another layer of the rotten onion falls away we see what we’ve unfortunately come to expect in this place, and as usual it is not very pretty.
The lunatics really are in charge of the asylum which is Cyprus. Do Cypriots lack any brainpower or thought when it comes to voting at general elections ? It is not a big island and the population is relatively small. People have a more of a chance to get to really know their politicians than densely populated countries like the UK and should be challenging these idiots and their strange ideologies.
I am part of a large group of property victims in the UK and help organise and attend many protests each year against Banks and corrupt developers. During a protest outside the Royal Courts of Justice in London last week we were approached by two political exiles from Russia who had been forced out of their country because of their vocal and visible stand against corruption. I think we need a few Cypriots to pluck up the courage to make a very visible stand against the overwhelming corruption in Cyprus. Have they forgotten how to protest. Am I ignorant of any efforts being made by Cypriots? Where are the photos and news stories of mass crowds of protesters outside the parliament building or law courts? Where has their fighting spirit gone? You can’t leave it to someone else all the time.
Ordinary citizens of Cyprus are appalled by the corruption they know pervades almost every level of their society, but moaning about it is not enough! When your jobs and family life are being threatened you need to make a stand. It’s surprisingly liberating when you protest publicly and it makes you feel proud that you are not one of the timid sheep who do nothing and just toe the line. Get out there and do something. Let your government know how you feel
I totally agree with your comments, but unfortunately the Cypriot People do not protest strongly enough to prevent it.
Also the Tourist industry has already been severely damaged over the last 10 years by the greed of the Cypriot people.
They have allowed indiscriminate building ANYWHERE with no controls, not only has this destroyed the character of the Island of Cyprus, but has forced land prices up so that local people especially the younger generation are unable to afford to purchase property.
A high percentage of Cypriot people find it necessary to have two jobs, a day job and and evening job, just to make ends meet.
Consider why tourists loved to visit Cyprus, and that was apart from the Weather and the friendliness of the people, but the architecture and culture of the towns and tillages, but now some beautiful buildings have been torn down and replaced with glass monstrosities.
The economic climate being bad worldwide, means that tourists have less money to spend on holidays, and yet for example in Limassol ALL the small family type hotels have now been converted into LUXURY apartments for rich people, so there is nowhere for many tourists to stay, especially families with children.
There were many good restaurants which provided great food and Greek music and dancing, but they have all gone and it is very rare to hear Greek music.
So we have incompetent, irresponsible and dangerous politicians attempting to raise the level of IPT on those who have legitimately registered their properties while the rest of the tax evaders get away with paying nothing by failing to comply with their legal duties.
It is hardly surprising then that Cyprus has been branded a ‘den of iniquity’ for its rampant fraud and corruption which clearly pervades all levels of society and resulted in it becoming a no-buy-zone for those who would otherwise have considered it an ideal location.
Peter, I understand that an immovable property has got to be registered at the District Lands Office and shown as actually existing before the registered Title Deed owner, (either you or your Developer), is required to pay any IPT or Transfer Tax to the Government.
If you own a piece of land for which you have the Title Deed and then build immovable property on it, but don’t declare or register this change at the relevant District Lands Office, I understand that you will not be charged for the IPT due on the increased value caused by the construction of the immovable property, and neither will you pay the Title Deed Transfer Tax for the immovable property because the authorities are not officially aware that the immovable property actually exists.
I believe that, apparently, this has been custom and practice for many years in Cyprus and that there are thousands of unregistered immovable properties for which IPT is not being collected correctly.
Instead of trying to increase the IPT for those of us whose properties have been properly and legally registered with the relevant DLO’s, maybe the Government should turn its attention to identifying and collecting IPT for those immovable properties which have existed for years without, apparently, paying a cent?
The hoteliers will scream and will be let off. The developers will threaten dynamic action and will be exempted. The locals will most probably ignore the issue, so the expats will pay the €20m in the end.
Or am I being cynical?
But Cyprus looks to the Golden Goose when times are hard.