Cyprus Mail: Press Review in English, 98-05-29

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From: The Cyprus Mail at <http://www.cynews.com/>

Friday, May 29, 1998

Tax hikes and privatisation on the cards

THE GOVERNMENT'S plans ro raise indirect taxes in an attempt to reduce the widening fiscal deficit, for once displaced the S-300 missiles from most front pages.

Alithia reported that the Minister of Finance was to submit a new tax package for approval at yesterday's special meeting of the Council of Ministers. The package would be accompanied by proposals for "social measures", aimed at protecting the low income groups, but no details were given.

According to the paper, VAT would increase from eight to 12 per cent while the duty on cigarettes would rise by 25 cents. The duty on fuel would also rise, but by how much it was not known. The taxes would increase government revenue by�100 million a year.

Machi reported that the government wanted to increase its revenue to cover its increased expenditure on development and defence projects. It also reported that higher duties would be put on tobacco and fuel.

The government would also amend legislation governing the import duties on used cars, because it feels large amounts of money are being lost by state. Importers were allegedly presenting customs with forged, under-priced invoices in order to pay lower duty, it said.

Haravghi reported that the government's plan to set up a public company with the participation of a foreign investor to run Larnaca and Paphos airports constituted the start of a privatisation drive. State- owned organisations would be sold off to capital at very low prices.

A foreign firm with know-how and expertise in the running of airports would be given a 35 per cent stake in the new company, with the government holding the remaining shares. Of all the airport services, only the air control tower would stay in government hands.

Simerini reported that comments made in Paris by Cyprus' EU negotiator George Vassiliou had caused a heated incident and angered the Foreign Ministry of Greece. Vassiliou had reportedly told French officials that Greece was ready to lift its veto on the EU's financial aid package for Turkey during the Cardiff summit.

Vassiliou had issued a new statement clarifying his position. In Cyprus, sources close to the government had said it was time that Vassiliou's role was clearly defined because he was behaving like a "super-minister and emissary of Greece and Cyprus".

Phileleftheros said the government was making efforts to counter the claim by US envoy Thomas Miller that a crisis was looming as a result of the arrival of the S-300 missiles.

The government did not believe there was any danger of "unpleasant developments for the Cyprus people during this period", said its spokesman, who urged the media to stop reports about the missiles as this did not serve the national interest.

Agon claimed that two British helicopters from the bases had been spying on National Guard positions in the Zygi area. The National Guard fired warning flares at the helicopters. Confirmation about the incident was given by the Minister of Defence.

© Copyright Cyprus Mail 1998

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