North ‘govt’ raises, then re-lowers VAT rate
Source: Cyprus Mail
The north’s ‘government’ within the space of a few hours on Monday night and Tuesday publicised plans to raise value added tax (VAT) rate on a total of 54 products, before making a u-turn within hours, and just hours before the new rates were set to be implemented at the start of the new year.
The rate hikes would have seen a five per cent VAT rate levied on basic products such as bulgur wheat, rice, pasta, dairy products, baby food, meat, poultry, fish, eggs, vegetables and olive oil, all of which are currently sold in the north without VAT.
Additionally, the VAT rate on products including soap, shampoo, toilet roll, white goods and products sold in coffee shops and restaurants would have been raised from five per cent to 10 per cent.
The news of the tax rise was first broken by opposition party CTP ‘MP’ Devrim Barcin, who announced in a social media post that “the government is reaching into ordinary people’s pockets again.
“With these increases in the price of consumer goods, which constitute many people’s basic needs, life will become even more expensive and our people’s purchasing power will decrease,” he said, adding that the ‘government’ is “taking decisions which are making life more expensive”.
The north’s restaurateurs’ association warned that the tax rises would have “disastrous consequences”, saying they would “impoverish the people” and cause the north’s tourism sector to “collapse”.
“Tourists from the Greek Cypriot side and people from abroad living here have started to leave the country due to the high cost of living and economic instability,” they added, saying that the tax rises and the loss of custom would drive the sector to “bankruptcy”.
However, they need not have worried overly about the tax rates, as Barcin revealed on Tuesday afternoon that the ‘government’ had made an about turn on its plans.
Declaring victory, he said, “the anti-people policies of [the three ruling coalition parties] the UBP, the DP and the YDP will be pushed back one by one with the fights put up by our trade unions, our civil society organisations and our people, both in parliament on the streets”.
He added that the ‘government’ “does not understand the ‘e’ of economy and constantly makes wrong decisions”.
Tuesday’s swift about turn on VAT rates is the second major u-turn the north’s ‘government’ has made in the space of a week.
A two-day general strike on Thursday and Friday forced them to “suspend” the passage of two bills through ‘parliament’, one regarding the payment of the cost-of-living allowance and the other regarding the signing of collective labour agreements.
The law over the cost-of-living allowance would, had the ‘government’ gone ahead, have reduced the number of times the amount payable as a cost-of-living allowance would be calculated from three per year to two.
The other bill stated that any collective labour agreement signed involving public sector employees would have had to receive a “positive written opinion” from the ‘finance ministry’ before it enters force, thus effectively giving the central ‘government’ the final say over any deal reached between unions and public sector employers.
The original article: belongs to Cyprus Mail .
