Letter from the General Secretary of AKEL to the President of the Republic on the withdrawal of the referrals to the Supreme Court of the laws passed by a Parliamentary majority for a reduction of taxes

 

8 September 2022, AKEL C.C. Press Office, Nicosia

The General Secretary of the Central Committee of AKEL, Stefanos Stefanou, today sent a letter to the President of the Republic in which he asks for the withdrawal of the President of the Republic’s referrals to the Supreme Court of the laws passed by Parliament for the reduction of taxes on fuel and electricity.

The letter is reproduced below:

“With this letter I request that you withdraw the referrals to the Supreme Court of the laws passed by Parliament which provide for a reduction in taxes on fuel and electricity.

More specifically, I am referring to the proposals for the abolition of the double taxation on fuel, the abolition of the imposition of 19% VAT on the fuel readjustment clause of the Cyprus Electricity Authority, as well as the reduction of VAT from 19% to 9% on the price of electricity. Indeed, I point out that the examination of the referral of the latter proposal has been pending since last January. 

The withdrawal of the referrals, as well as the implementation of the above legislation, is logical, fair and imperative for a number of reasons, including:

1. These proposals enjoy a broad parliamentary majority as they were supported by all parties – except the ruling DISY party. The withdrawal of these referrals on your part will send a clear message of political will for cooperation between the executive and legislative power.
2. The fiscal cost of implementing these proposals is not unbearable for the state, especially at a time when state revenues have been increasing sharply because of the unexpected collections in windfall tax due to the ongoing price hikes. As the relevant figures from the Statistics Office reveal, in the first seven months of 2022, the Government has increased revenues in excess of 850 million. Furthermore, it is estimated that these revenues will exceed one billion by the end of the year. Under these circumstances, it is incumbent on the government to allocate more resources to provide relief to households, small and medium enterprises and the vulnerable groups of the population.
3. The withdrawal of the referrals will also end the debate on whether or not the principle of separation of powers has been violated, which in our assessment, as well as that of the parliamentary majority, does not exist on this issue. Besides, on this issue there is a Supreme Court decision from 2009, which explicitly holds that the Constitution allows Parliament to legislate even to reduce state revenues.
4. Such a move would lead to a reduction in taxes on electricity and fuel and would bring our country in line with decisions already taken by a number of EU member states.

Based on the above facts and against the background of the need to support society from the pressure caused by continued price hikes, everything suggests that the appropriate option would be to withdraw the relevant referrals as soon as possible and to proceed with the implementation of the legislation approved by the overwhelming majority of Parliament.

Yours sincerely,

Stefanos Stefanou

General Secretary of the Central Committee of AKEL”