OPPOSITION DISY said yesterday a legislative proposal would be tabled on Thursday that would require everyone to file a tax return irrespective of their income, after it emerged that one in two people do not have a tax file.
Currently a vast swathe of the population ? those earning under ?19,500 ? are not required to submit tax returns. The head of the Inland Revenue Department (IRD) informed MPs that as many as one in two do not currently have a tax file.
?The vast majority of tax evaders are hiding among these people,? said DISY deputy Averof Neophytou.
?We, along with other colleagues and parties, plan to submit a legislative proposal, making it obligatory for all members of the public to submit tax declarations?.?
He was speaking after the committee discussion on a long-anticipated government bill promising to punish non-compliance with tax laws with a ?name and shame? list.
During the committee session, Attorney-general Petros Clerides voiced strong reservations over the bill?s provision that gives the finance minister the discretion to choose whom of those caught tax evading ? or avoiding ? should be named publicly.
?If we want to expand the powers of the Finance Minister we can do so but not in the manner being proposed, that is, that the minister can, at any time and without any limitation or commitment, furnish data on anyone,? Clerides told MPs.
However, the Attorney-general?s office ? whose feedback is periodically requested to determine whether a law is in breach of the Constitution or not ? had previously furnished a legal opinion stating that a naming tax evaders would not be unconstitutional.
Likewise, the commissioner for the protection of personal data has said that naming tax evaders is permissible provided certain conditions are met.
But opposition politicians protest that the discretionary powers given to the Finance Minister may be abused politically, for example, by publishing the names of certain people while omitting others.
The text of the government bill currently makes no distinction nor does it place any criteria for when names of tax evaders should be published.
The only restriction in the bill concerns excluding those people who owe money to the state but who have appealed the results of an examination of their tax returns. In the event an appeal has been rejected, that person is considered to be liable and he or she could then be included on a name-and-shame list.
??No conditions have been set regarding whose names will be made public, raising questions over whether this will be applied equally for all or whether it will be used arbitrarily,? said committee chairman Nicholas Papadopoulos (DIKO).
Deputies insisted that the government take another look at this, and come back to them with a finalised text in mid-October.
DISY?s Neophytou, referring to the name and shame list, said: ?The most appropriate approach ? seeing that we all agree that the names should be made public ? should be to regulate it by law so that at the end of each year, the head of the Inland Revenue Department will publicise the names of those who didn?t pay their dues. If there is any amount limit or any other condition, this should be determined by law and not by any minister,? he said.
Under current practice, the Finance Ministry shares information on tax evaders among governmental departments, but not to the public.
EDEK?s Nicos Nicolaides said there were some well-known cases of people with massive income, who avoided paying their dues ? ?resulting in a significant loss of revenue for the state, which law-abiding taxpayers have to cover?.
The Green Party?s George Perdikis ? who said this was the first time in his 11 years in parliament that he saw the AG disagree so intensely with a government bill ? said it was time for those who evade their taxes at the expense of other taxpayers, to be ?publicly humiliated.??
Currently, above the non-taxable threshold, income tax is charged at the rate of 20 per cent on income between ?19,501 and ?28,000. ?Income between ?28,001 and ?36,300 is taxed 25 per cent, rising to 30 per cent for income between ?36,301 and ?60,000. Thereafter income is taxed at 35 per cent.
The state is owed about ?400 million in unpaid income tax.
Source: http://www.cyprus-mail.com/tax-evasion/plans-tighten-tax-evasion-noose/20120925
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