The amended bill does not regulate the reduced 5% VAT correctly and fairly

Statement by AKEL MP Andros Kafkalias after the meeting of the Parliamentary Finance Committee

 

24 April 2023

The amended bill submitted by the government before the Parliamentary Committee on Finance does not resolve the issues that have arisen with the concession of the reduced VAT rate of 5% for the construction or purchase of a house.

The 10% increase in the values of residential properties, provided for in the Bill, does not reflect the actual values in the property market.

At the same time, we note that there is no changes made in the ceilings on property values between construction and purchase.

In addition, there are problems with regards the application of the legislation for the purposes of extending an existing dwelling.

Shortcomings are also identified in the regulation of transitional provisions. In addition, injustices are created among citizens who are left without any cover, not through their own fault, but because of delays noted in the issuing of planning and building permits, for which the State itself is responsible. At the same time, potential distortions in the property market are not being addressed to the greatest possible extent.

Knowing that the European Commission has begun the procedure for legal action to be taken against the Republic of Cyprus for the violation of the European Directive, the House of Representatives is called upon to take decisions in the period ahead immediately.