24/06/22

CYPRUS: Selk proposes plan to develop economy.

As published on cyprus-mail.com, Friday 24 June, 2022.

The Institute of Certified Public Accountants (Selk) on Thursday submitted a six-part plan to further develop the Cypriot economy and businesses.

“Maintaining the strength of our economy does not depend only on the external environment and its effects,” Selk president Pieris Markou said.

“Our efforts to modernise are also a key factor, alongside the implementation of the necessary reforms and ability to exploit new areas of economic activity,” he added.

Markou said that the war in Ukraine continues without an end in sight, causing unprecedented upheavals on the global stage, including in Cyprus and Europe as a whole.

Referring to the effects on the economy, Markou stressed that sectors such as tourism, real estate, foreign investment, financial and professional services, shipping and others, were severely impacted.

This was due to uncertainty in international markets, but also the decoupling of the Russian and Ukrainian markets from one another, which, in turn, caused a chain reaction elsewhere in the world.

At the same time, the international energy crisis and supply chain disruption, as a result of the war, sent inflation soaring, undermining the growth of the economy and reducing the purchasing power of households.

The institute’s first proposal revolves around public sector reforms, with Markou saying that these “will define the way in which the state and private citizens will operate”.

He added that the cost of running the public sector comes from the taxes that people pay, so any inefficiencies, delays and complacency will be shouldered by the private sector.

The second proposal relates to reforms to Cyprus’ tax and corporate structures and frameworks.

“Both Selk and its members are calling for serious changes in the country’s tax model,” Markou said, adding that the existing model is outdated.

Regarding tax reform, Selk said that the new tax system should be able to service Cyprus’ current and future needs, based on the economic development strategy leading to 2035.

Moreover, Selk also called for the restructuring and upgrading of the tax department so that it can operate more efficiently.

Selk stressed it is opposed to the Finance Ministry’s mention of a corporate tax increase from 12.5 per cent to 15 per cent.

Markou also spoke on the need to improve Cyprus’ competitiveness, particularly through various actions in the fields of technology and innovation, but also by using the island’s comparative advantages to attract foreign investment.

“Cyprus’ fall in international competitiveness rankings is troubling,” Markou said.

The Selk president also mentioned that Cyprus should also focus on improving its international reputation.

“Despite the efforts made by many public bodies and the private sector, we need to do something to restore our country’s perception,” Markou said.

This, he added, presupposes consistent and systematic monitoring of international media in order to respond to any accusations, as well as a clear strategy in economic diplomacy.

The final two sections of Selk’s action plan revolved around the digital transition and sustainable development.

“It is necessary that we take sustainability seriously and look to the future in order to decide today what we will leave for the next generation,” Markou concluded.