YPOIK blames Mavridis for the issue with the reduced VAT on homes

In contrast to other countries where reference is made to their Country Recommendations in the European Semester, in the case of Cyprus there is no reference to the issue of social housing / affordable housing and, as a result, social housing is not reflected as a pillar of investment in the national Recovery and Sustainability Plan. (SAA), the Ministry of Finance states in an announcement in relation to statements on the issue of DIKO MEP (S&D) Costas Mavridis.

It is recalled that MEP Costas Mavridis in a recent announcement states that "The Recovery and Sustainability Plan submitted by the Ministry of Finance to the EU for € 1.2 billion does not include a single euro for housing, while Cyprus could receive 100% sponsorship (not loans) for the acquisition of housing e.g. by young couples, for country houses etc. Other Member States have applied for and received billions. The inability of young couples to obtain a home contributes to the low birth rate, which in Cyprus is a social problem but also a problem of survival. Was the Cyprus Plan made… by mistake or is it a satisfaction of selfish interests to the detriment of Cyprus and the financially weak?»

In its response yesterday, YPOIK also notes in relation to the reduced VAT rate of 5% on the delivery or construction of housing, the issue arose after a complaint by MEP Costas Mavridis "for purely micropolitical purposes, putting the state in a difficult position, leading us in modifying the framework making it stricter ".

It is recalled that after references in reports of the Auditor General, after debates in Parliament and press reports on the irregular application (in violation of a European directive) of reduced VAT rate 5% instead of 19% on the purchase or construction of housing, MEP K. Mavridis, raised a question with the Commission on this matter. In its response, the Commission informed Mr. Mavridis that it is closely monitoring the issue and that it is going to make the appropriate moves. Finally, a few weeks after its response to the MEP, last summer the Commission initiated an infringement procedure against the Republic of Cyprus. The Infringement Procedure, according to the Minister of Finance himself, can lead the Republic of Cyprus to the European Court of Justice by imposing a large fine but also the obligation to pay the evaded taxes (ie the difference of 19% with the 5% that was applied illegally) amounting to many tens of millions, to be on the table.

YPOIK response to the announcement and the reports of K. Mavridis 

Specifically, in his announcement on the statements of Mr. Mavridis, it is stated that "according to the relevant Regulation 2021/241 / EU, the Recovery and Resilience Plan (SAP) of Cyprus was prepared after consultation with stakeholders including political parties and following a dialogue with the EU Commission ".

"Apart from promoting the green and digital transition, the SAA had to deal effectively with the challenges identified in the European Semester and in particular in the specific Country Recommendations of 2019 and 2020," it added.

Regarding, therefore, it is noted that "the criticism leveled at the non-inclusion of policies that promote social housing in the SAA states that, unlike other countries, such as Greece, Spain, Ireland and Sweden where reference is made to their Country Recommendations, there is no reference in the case of Cyprus to the issue of social housing / affordable housing and, as a result, social housing is not reflected as a pillar of investment in our national SAA ".

However, it is clarified, "the National SAA has included expenditures for energy upgrades that are a significant challenge for the family budget. Specifically for the energy upgrade plans, approximately € 100 million will be allocated, of which more than € 20 million relate to the energy upgrade of the houses and the treatment of energy poverty ".

"In addition to the SAA, the state is implementing a range of housing policy plans for which the expenditure in 2021 amounted to around € 95 million, while according to the approved Budget of 2022, expenditures of € 116 million are foreseen", it is reported.

The announcement of the Ministry of Finance concludes by noting that "regarding the provocative statements about the Government's manipulations, in relation to the imposition of a reduced VAT rate of 5% on the delivery or construction of a house, it is emphasized that the issue arose after his own complaint MEP Costas Mavridis for purely micropolitical purposes, putting the state in a difficult position, as a result of which we are leading to a change in the framework, making it stricter ".

SOURCE: CIPE