Councils owe 338 million TL,
MUNICIPALITIES owe some 338 million TL in overdue tax, and social insurance and Provident Fund premiums and could take 20 years to repay to the government, it emerged this week.
According to newly released figures, 17 of the country’s 28 municipalities have debts totalling 213 million TL for social insurance and Provident Fund contributions for their workforces, while 19 owe 125 million TL in tax.
Although the authorities are allowed to settle their debts in 240 monthly instalments, local government sources said the payments were proving a heavy burden because, while a new national budget has yet to be passed for 2018, they can only use the equivalent of one-twelfth of their allotted funds for last year.
Head of the Municipalities’ Union Ahmet Benli claimed special repayment plans including discounts had been offered to some municipalities but not others.
“We intend to take this matter to the High Administrative Court and have begun preparing he necessary documentation,” he told Kıbrıs, the Turkish-language sister newspaper of Cyprus Today.
The Tax Office has written to 14 municipalities which did not apply to repay their debts in instalments, telling them that they must make 240 equal payments over 20 years while three municipalities — Girne, Akıncılar and Yeniboğaziçi — had previously agreed to instalment payments and were rewarded with discounts. Beyarmudu and Paşaköy also applied for an instalment programme after receiving a letter from the Tax Office.
The highest monthly instalment to pay off overdue tax is 336,000TL demanded from Lefkoşa Turkish Municipality, followed by Lefke with 74,000TL. The Lefkoşa authority, however, took the issue to the High Administrative Court and secured an interim order to suspend payment. Other municipalities are now expected to follow the Lefkoşa lead, including Yenierenköy, Alsancak, Serdarlı, İnönü, Geçitkale, Lapta, Esentepe, Lefke, Mehmetçik, Büyükkonuk, Dipkarpaz, Çatalköy and Akdoğan.
“We are giving the municipalities as long as 20 years to settle their outstanding debts with us,” said head of the Tax Office, Özdemir Kalkan. “We are aware of problems they are facing with the budget and are prepared to accept low instalments until the 2018 budget is approved.”
Mr Kalkan pointed out that under the law, municipalities had to initiate negotiations with the Finance and Labour and Social Security ministries and should have reached an agreement by January 1.
“Most of them did not even go to a meeting to discuss the issue, however, so letters were sent to them on January 11 informing them that their debt had been divided into instalments for payment over 20 years. They were also informed that they could contact the office by January 20 to discuss any proposed changes,” he said.
“It is the duty of the Tax Office to collect outstanding revenues from both the public and the private sectors.”