The Cyprus Employers & Industrialists Federation (OEB) has expresses its deep concern about the resumption of the discussion on imposing additional (beyond the special fee paid since 2011) extraordinary (windfall) taxes on bank profits, which, it says, are inaccurately characterised as being unexpected.
As the OEB emphasises in its statement, "the only thing that was unexpected at the time of the collapse of our financial system and the fiscal bankruptcy of the State during the crisis of 2011-2014 was the trust that international investors showed and, with a high degree of risk, they contributed decisively to the rescue of the Banks and by extension the entire Cypriot economy."
"These investors supported this strategic sector with billions and for years had no return, no dividend and no benefit. However, they saw the prospects and showed confidence in the stability of the legal and tax framework. Through a strict policy of cost containment, with extensive use of technological applications and a dramatic reduction (over 50%) of personnel, they managed to have profitable results for the first time in a decade," OEB emphasises.
OEB said it considers it inconceivable to punish a sector because, with its prudent policy, it has become profitable and self-sufficient. Furthermore, such a thing is dangerous, as no serious investor will trust the country from now on: If an additional extraordinary tax is imposed on Banks today, tomorrow it can be imposed on any other sector or economic activity, the Federation's statement continues.
In addition to the above, the Federation indicates that "the interventions under discussion, in addition to being potentially unconstitutional, are directly contrary to the recommendations of the International Monetary Fund and the European Financial Stability Mechanism and may have a negative impact on the credit rating of not only the sector, but also our economy as a whole."
OEB calls on the country's political forces to abandon initiatives that, if adopted despite hopes to the contrary, will in the medium term harm those who seek to benefit from their initiatives.
"From 2017 to 2024, banks have paid a total of 755 million euros to the public coffers as corporate tax on profits and as a special tax on deposits. The State can, if it wishes, use part of these for social solidarity purposes without any side effects," OEB's statement concludes.
(Source: InBusinessNews)
