New Tax on bank deposits
This afternoon after a heated debate, the majority of the Cyprus, House of Representatives passed a law fixing additional tax applicable only to banks.
The creation of the tax was passed with the joint amendment of DISY and the Democratic Party, which outvoted AKEL and EDEK.
The government proposed that the bank’s deposits were taxed with an extra 0.095% on domestic and foreign deposits for the years ended 2011 and 2012 with an aim to receive € 60 million annually.
The law was unanimously agreed by the parties, but with the proposed amendment that the taxation continues even after 2012.
After 2012 all revenues generated from the tax will be transferred to a bank financial stability fund created by the Central Bank, rather than the Consolidated Fund of Cyprus.
It was proposed that taxes collected in 2011 and 2012 and which will be placed in a special account of the Republic of Cyprus and that €50 will be transferred to the bank financial stability fund by the end of March 2013. The other € 70 million are likely to be used to cover the financial needs of the state, as was originally requested the Ministry of Finance.