Tax amnesty nets CYP 112 mln

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The government has raised CYP 112 mln in revenue from the one-off tax amnesty offer for the declaration of secret amounts until end of December 2002.

The Chairman of the Tax Declarations Office Andreas Theophilou told a House Finance Committee briefing that for the week ended February 18, total revenue amounted to CYP 112 mln, which means CYP 2.25 bln of funds or sources of income were declared.

The first phase of the tax declarations ended January 31, 2005 at the flat rate of 5%. The second phase, whereby declarations are taxed at 6.5% will run until the end of February, but the authorities admit that most of what was going to be declared has already been made.

Finance Ministry officials meanwhile told deputies that the government intends to use CYP 30 mln in funds from the total tax amnesty as an extraordinary benefit for the 2004 state accounts, transferring the balance of CYP 85 mln to the 2005 accounts.

The state had already budgeted CYP 40 mln in extraordinary income from the tax amnesty in its convergence plan submitted to Brussels and officials made sure that most of the funds would be booked in the 2005 accounts to help in efforts to reduce the budget gap to 2.9% for 2005.

Theophilou also confirmed earlier reports that all the declaration forms submitted by the public for the tax amnesty would be destroyed, keeping only the reference number and amount paid details, which would only be issued if the person making the tax amnesty so requested.

Banks meanwhile were given a one month extension until end of March before they disband the phenomenon of secret accounts.