Cyprus employers KEVE, OEV oppose monthly VAT submissions

Both employer organisations in Cyprus have criticised the government’s plans to change the period of VAT submissions by large companies from quarterly to monthly, saying this will seriously hurt their liquidity and calling on the government to rescind its decision.
The Cyprus Chamber of Commerce and Industry (KEVE) expressed disagreement with the decision of the Director of VAT at the Ministry of Finance to change the tax submission of large companies from the beginning of October.
KEVE said that such a decision will have a negative impact on the liquidity of the affected organisations. The Chamber made particular reference to the Greek government’s decision to allow companies to pay on submission of their VAT report only 30% of the dues and the remaining balance in two installments, as opposed to the proposal in Cyprus to demand large companies to settle their VAT obligations on a monthly basis.
Finance Minister Charilaos Stavrakis is reported to have backed the decision to demand from 81 of the largest companies of Cyprus to settle their VAT obligations on a monthly basis, saying that this move will boost state finances by EUR 50 mln and reduce the deficit for 2009 by 0.3%.
The Employers and Industrialists’ Federation (OEV) added that this will be another blow to companies that are already struggling with the economic crisis.
OEV said that companies will have to submit their VAT within a month of the sale or issue of the invoice at a time when many are obliged to sell on credit for several months which is never passed on to the consumer or the customer.
On the other hand, OEV said that many exporters are delayed in receiving their tax refunds from the VAT Dept., denying companies crucial liquidity that often reaches several hundred thousand euros.