Cyprus income tax receipts tumble 14% in 2009

Cyprus income tax receipts tumbled by 14% year-on-year to EUR 1.84 bln in 2009 from EUR 2.15 bln in 2008, according to the Inland Revenue Department, creating a gap of EUR 310.5 mln.
The income tax gap of EUR 310.5 mln, when added with the EUR 265 mln shortfall from indirect taxes for 2009, takes the deficit to EUR 575 mln or 3.4% of GDP.
The Inland Revenue Department reported that the biggest decline in tax receipts referred to the collapse of the property market, which forced capital gains taxes 75% lower to EUR 75 mln from EUR 302 mln in 2008. Income tax from employees in 2009 increased by 10% to EUR 496.8 mln, income tax from the self employed fell 2% to EUR 61.6 mln, while income tax from corporations fell 11% to EUR 735.1 mln.
Receipts from the special defence tax imposed on bank deposits fell by 5% to EUR 367 mln in 2009.

INDIRECT TAXES TUMBLE

Indirect taxes in 2009 fell by 10.1% year-on-year or EUR 265 mln to EUR 2.36 bln from EUR 2.63 bln in 2008, with VAT receipts declining 10.2% to EUR 1.74 bln in 2009 compared to EUR 1.94 bln in 2008.
A 25% decline in total imports (up to Nov ’09) forced import duties down by 30% to EUR 39.8 mln, while a 26% decline in vehicle registrations (until Nov ’09) resulted in a 34.5% decline in duties imposed on motor vehicles, which fell to EUR 88 mln.
All import duties without VAT fell by 9.5% YoY to EUR 615.1 mln in 2009 from EUR 681.1 mln in 2009, while when the VAT totals were added, the total indirect tax receipts showed the EUR 265 mln gap.