Cyprus Church goes on warpath over tax

By Sarah Ktisti
REUTERS

4:52 a.m. June 10, 2008

NICOSIA – Cyprus's powerful Greek Orthodox Church went on the warpath with the government on Tuesday in a dispute over taxes that authorities hope could keep state finances looking healthy this year.

Struggling to meet a surplus target, Cyprus's finance ministry has said it will seek unpaid taxes from the Church. Last week, it singled the Church out among what it said were several taxpayers that owed the state some 490 million euros.

'They are not getting even one euro out of us, we don't owe them anything,' said Archbishop Chrysostomos (eds: one name), head of an institution tracing its lineage back to one of Christ's first disciples.

Known for a no-nonsense approach and a sharp tongue, the black-robed cleric told a news conference: 'This is a provocation in the first degree. It is populist.'

The institution has business stakes ranging from beer production to luxury hotels and the island's third largest commercial bank.

The government did not say specifically what it believed the Church owed, saying this was a privacy matter.

COURT VERDICT

The Church pays its dues on all commercial activities, clergymen said. The dispute was focused on attempts to charge tax on real estate, in a wrangle which ended with a court verdict in favour of the Church, they said.

'Strictly speaking, they owe us, we don't owe them,' Chrysostomos said.

The finance ministry stood its ground. 'We believe there are certain outstanding issues, and we want to sit down and discuss the matter with them,' a finance ministry source told Reuters.

Finance Minister Charilaos Stavrakis took the soft approach. 'We don't want war with the archbishop, we want a lot of love,' he told journalists.

Cyprus is hoping to break even on its budget this year, following an unexpected 3.3 percent surplus in 2007.

It had initially forecast a 0.5 percent surplus for this year, but says soaring costs of fuel and a crippling drought forcing the island to import water from Greece could make that target difficult.
SOURCE:

READ THE PREVIOUS POST RELATED TO THIS STORY: