HOUS­ING TAX ‘MUST GO UP’

UNION PRE­DICTS ‘UT­TER CHAOS’, MAY­ORS SAY TAX RISE NEEDED TO AVERT BANK­RUPTCY

Cyprus Today - - FRONT PAGE - By GILL FRASER and KEREM HASAN

PROP­ERTY tax must go up to avoid a lo­cal gov­ern­ment fi­nan­cial cri­sis which could see coun­cil ser­vices suf­fer and staff go un­paid, the coun­try’s may­ors have warned af­ter learn­ing that gov­ern­ment sup­port pay­ments are to rise by 29.4 per cent this year.

Nine months af­ter the gov­ern­ment with­drew a con­tro­ver­sial 14 per cent hike in the tax on home­own­ers af­ter an out­cry over its retroac­tive im­po­si­tion, mu­nic­i­pal­i­ties are now de­mand­ing it go up to boost their in­come.

They said the in­crease in state fund­ing did not even make up for the 29.96 per cent in­fla­tion of­fi­cially recorded dur­ing 2018, let alone en­able them to re­cover from ex­ist­ing prob­lems, and warned that “all mu­nic­i­pal­i­ties would be bankrupted” un­less prop­erty taxes — a prime source of lo­cal au­thor­ity rev­enue — were put up. The may­ors said 23-yearold leg­is­la­tion on lo­cal gov­ern­ment was out of date and needed to be mod­ernised, while pop­u­la­tion-re­lated dis­tri­bu­tion of gov­ern­ment con­tri­bu­tions was also flawed be­cause of rapid changes in num­ber of res­i­dents, and de­manded a fresh cen­sus as soon as pos­si­ble.

Cost-of-liv­ing al­lowances due to staff this year, in the wake of last year’s TL cri­sis, would mean a “con­sid­er­able in­crease” in wage bills which most mu­nic­i­pal­i­ties would not be able to af­ford, it was said.

Mustafa Yalınkaya, head of the BES mu­nic­i­pal­ity work­ers’ union, pre­dicted “ut­ter chaos this year” un­less coun­cils re­ceived more state fund­ing.

“The fig­ure of 29.4 per cent in­crease makes up about 8.75 per cent of the TRNC bud­get. In Tur­key, 12 per cent of the bud­get is al­lo­cated for mu­nic­i­pal­i­ties, whilst in the EU, this fig­ure is 34 per cent,” he said.

“We main­tain the view that mu­nic­i­pal­i­ties will face great hard­ship through lack of fund­ing, and it will hit them later on in the year.”

Mr Yalınkaya said there was a “great in­jus­tice” in the ex­ist­ing prop­erty tax regime, which he said had stood since 1996 and charged home­own­ers 1TL per square me­tre across the board.

“How can tax on a lux­ury villa with a swim­ming pool be charged at the same rate as a vil­lage house in the Me­sao­ria Plain? The gov­ern­ment con­trols this through the law and has failed to take away this in­jus­tice.”

Le­fkoşa Mayor Mehmet Har­mancı slammed the rise in gov­ern­ment con­tri­bu­tion as “not even an in­crease” be­cause it was less than in­fla­tion, while his Girne coun­ter­part, Nidai Güngördü called for a new pop­u­la­tion count, since there had been a ma­jor rise in num­bers

since the cur­rent of­fi­cial fig­ure of 33,200 had been ar­rived at for his town. The mu­nic­i­pal­ity had to be re­shaped ac­cord­ing to the real num­bers now liv­ing within its bound­aries and us­ing its ser­vices.

Çatalköy’s Mehmet Hu­lu­sioğlu said mu­nic­i­pal­i­ties were al­ready ex­pe­ri­enc­ing ma­jor prob­lems as a re­sult of ris­ing costs, and these would only grow, lead­ing some to a point where they would no longer be able to pay their staff. Lo­cal gov­ern­ment re­form was needed rather than such “su­per­fi­cial” ef­forts, he said. Lapta Mayor Mustafa Ak­tuğ said he faced par­tic­u­lar dif­fi­cul­ties, hav­ing “found a bank­rupt mu­nic­i­pal­ity” when he took of­fice last sum­mer, and af­ter bear­ing the brunt of last year’s flood dis­as­ter he now had a fur­ther loss of some six or seven mil­lion TL.

He said cur­rent fund­ing lev­els took no ac­count of in­fla­tion dur­ing 2019, and com­mented: “We may not be able to pay the salaries of our 165 work­ers, or may be forced to take other prac­ti­cal mea­sures that will af­fect our ser­vice, like for ex­am­ple, not be­ing able to pick up rub­bish twice a week.

“We hope that this does not hap­pen. But this is a very se­ri­ous threat to our sus­tain­abil­ity of ser­vices.”

His coun­ter­part in neigh­bour­ing Al­san­cak, Fırat Ataser, added that far from boost­ing lo­cal au­thor­ity in­come, the gov­ern­ment was “block­ing” it with tourism and ed­u­ca­tion in­cen­tives which ex­empted busi­nesses from cer­tain mu­nic­i­pal charges. He de­manded a new cen­sus and Mu­nic­i­pal­i­ties Law re­form ur­gently.

Esen­tepe Mayor Ce­mal Er­doğan, whose coun­cil was pin­pointed last year along­side Lapta as one of those in the direst fi­nan­cial straits, said he would be left with noth­ing in the cof­fers once staff wage rises, so­cial in­sur­ance and Prov­i­dent Fund pre­mi­ums had been paid.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.