Cyprus wants to delay VAT on land purchases until 2010

Cyprus has asked the Commission for permission to delay the imposition of 15% Value Added Tax (VAT) on land purchases, limited ranged of foodstuffs and medicine until mid-2008 or 2010 instead of January 2008.

Finance Minister Michalis Sarris said a number of other EU member states had made a similar request and is confident that the Commission will give its response before the year-end.

He clarified that the measure would only refer to land purchases made by developers and is not intended to have an impact on prices, eventhough he admitted that the news that VAT would be imposed on land has had a significant effect in the direction of land prices.

Cyprus has also asked to delay the imposition of 3.1 cent tax on petrol goods from January 2008 until mid-2008.

Opposition DISY party MPs Lefteris Christoforou and Maria Kyriacou criticized the government’s tax policies, which they claim has raised the level of taxation from CYP 700 mln to CYP 1.5 bln, without a corresponding increase in benefits.