Cyprus tax revenue declines in Jan-Feb ‘09

Tax revenue collected by the Inland Revenue Department (IRD during the period January – February 2009 declined by 7.2% year-on-year to EUR 318.8 bln. The decline in revenue is mainly attributed to the significant decline in revenues from Capital Gains Tax which
plummeted by 83.2% to EUR 9.6 mln, owing to the decline in demand in the property market. As analysts at Marfin CLR Financial Services noted, during the first two months of the year, property sale contracts announced by the Land Registry Departments were also down by 68.2% yoy supporting the above decline in property market related revenues. This is also in line with forecasts made by the Finance Ministry, forecasting a major decline in revenue in 2009, which will force government borrowing higher.