Plenary: Extraordinary meeting after referrals for fuel, electricity, sales

Today, Tuesday, the Finance Committee of the Parliament and then the Plenary Session of the House hold an extraordinary meeting today, Tuesday, to discuss the referrals of three proposals of law that the Plenary voted on July 14 and sent by the President of the Republic Nikos Anastasiadis at the end of July.

The referrals concern the proposal to abolish double taxation on fuel, the proposal to abolish VAT on pollutants in the price of electricity and the law to suspend sales for three months.

In his letter to the Speaker of the Parliament, Annita Dimitriou, President Anastasiades states that he has forwarded the "Value Added Tax (Amendment) (No. 2) Law of 2022". "The House of Representatives, through the passing of laws such as the Law under Referral, which affect the planning of fiscal policy, unconstitutionally interferes with the powers of the executive power," President Anastasiades points out, quoting opinions of the Supreme Court.

Furthermore, he notes that the Referred Law has a major impact on public finances and its implementation will derail the fiscal commitments and objectives of the Republic. "Specifically, the estimated loss of revenue from the non-imposition of VAT on the excise duty on fuel is estimated to rise for the period up to December 31, 2022 to €30 million", says President Anastasiades.

Regarding the proposal to abolish the VAT on pollutants in the price of electricity, in his letter President Anastasiades states that the Law under Referral has a great impact on public finances and its implementation will derail the fiscal commitments and objectives of the Republic.

The estimated loss of VAT collections from EAC invoices from the imposition of a zero VAT rate on the Fuel Price Adjustment Clause, for the period July-December 2022 amounts to €75 million.

Furthermore, President Anastasiades points out that the public finances are disproportionately burdened by the adoption of such non-targeted measures, which do not adapt to the financial capacity of consumers but neither achieve the goal for which they are established, which is to relieve electricity consumers from the increase in fuel costs.

If the purpose is to serve the relief of households and businesses, i.e. the exercise of social policy, these legislative proposals will have the opposite effect, he notes among other things. The biggest benefit from further tax cuts will go to the biggest electricity consumers, taking advantage of the loss of revenue from the state, he says.

In relation to the law on the suspension of sales for three months, in his letter to the Speaker of the Parliament, President Anastasiades mentions that he sent the "Transfer and Mortgage of Real Estate (Amendment) (No. 2) Law of 2022", explaining that any arrangement regarding a horizontal suspension of the real estate sale process, he does not agree with, since this measure of suspension has ceased to be characterized as temporary.

Furthermore, he repeats his concern, "that the general tendency of the Parliament to pass continuous suspensions can be interpreted as permanent rather than temporary both by the borrowers and from the supervisory side".

The session of the Finance Committee is scheduled for 9.30 am while the Plenary is expected to convene at 12.00 noon.