Cypriot archbishop, government strike deal over Church back

© AP
2008-06-11 20:46:33 -

NICOSIA, Cyprus (AP) - The head of Cyprus' Orthodox Church and the island's finance minister said Wednesday they have struck a deal to end a dispute over back taxes.Archbishop Chrysostomos II and Finance Minister Charilaos Stavrakis said they will appoint a four-member committee to look into Church taxes.

«We are not going to continue the confrontation;
it ends here,» Chrysostomos said. «This confrontation ... does not benefit either us or the government.The dispute over capital gains tax on property transactions threatened to damage relations between the Church _ one of the island's biggest landowners _ and the communist-rooted governing Akel party. The Archbishop has said that the Church owes nothing.Stavrakis had said the Church had «serious outstanding tax issues,» but would not say how much it owed. Chrysostomos responded that he was insulted by suggestions the Church isn't paying its share of taxes to help the poor.But on Wednesday the archbishop said the Church «wants to pay taxes.The Church owns an estimated of ¤1.2 billion (US$1.86 billion) worth of property and business holdings.

Stavrakis said the new deal would be based on an earlier informal agreement that absolved the Church of paying capital gains taxes on property transactions completed prior to 2005.«We'll start from there, we will add, we will subtract until an agreement is reached,» Chrysostomos said.

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