Council of Ministers makes a U-turn on property tax decision
THE government has reversed a controversial decision to increase annual property tax, which had last month sparked confusion and anger, and prompted calls urging people not to pay up at the higher rate.
Finance Minister Serdar Denktaş on Tuesday announced that the Council of Ministers had revoked its March 10 decision to increase the tax by up to 14 per cent, applicable immediately, following municipality objections.
The U-turn was confirmed that day in the Official Gazette.
Challenged in Parliament by main opposition National Unity Party (UBP) MP Hasan Taçoy, who said it was “wrong’’ to ask people to pay more tax than they had been notified of in January, Mr Denktaş said ministers had originally seen the rise as a financial helping hand for cash-strapped local government, but
had changed their minds after complaints from municipalities tasked with collecting the levy. He said anyone who had paid the higher amount in the meantime would be reimbursed via a reduction on their next bill.
Lefkoşa Mayor Mehmet Harmancı, who had been among vociferous critics of the belated tax hike, welcomed the about-face by ministers.
However he urged the government to consider increasing property tax, which has remained static for over a decade at 1TL per square metre for a standard concrete-construction house, in time for next year.
Economist Göksel Saydam, who had urged owners via Cyprus Today not to pay the “unfair” higher tax, also applauded ministers, saying: “It’s a positive move because justice needs to come before money.
“The government can go ahead with a decision to increase annual property tax, but it needs to be done in legal way.”
Mr Saydam said the hike had breached local and international tax regulations, and ministers might have acted “hastily” or been under the pressure from councils “which are in dire straits financially”.
He added: “Justice has been served . . . [and] it shows that if there is a will, the principles of the rule of law can be acknowledged.”