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- Ελληνικά
Measures that should be taken to deal with the consequences of the Ukrainian war in Cyprus are proposed by the KEBE in a letter to the President of the Republic.
The main problems that Cyprus is expected to face in the coming period, according to the CBI, are high inflation, which will lead to reduced sales and liquidity problems, high energy costs, limited quantities of cereals, shortages of raw materials which are expected to affect the smooth operation of several businesses.
Therefore, the KEBE proposes to the President of the Republic targeted measures to address these problems. In particular, it proposes to reduce energy and fuel costs. In order to achieve this, the KEBE proposes to consider the possibility of a temporary suspension of the mandatory use of biofuels in refined products.
Furthermore, the KEBE urges to ensure sufficient quantities of cereals and to subsidize part of the increased prices for livestock purposes.
Strengthening the resilience and decoupling of the economy on energy self-sufficiency issues with a focus on investments in the areas of renewable energy, energy saving and the advent of PV, the KEBE also proposes including large enterprises in the subsidy plan for the installation of photovoltaic systems.
In addition, it is proposed to strengthen the country's self-sufficiency in a number of products considered strategic for the survival of citizens and the smooth operation of industries, with emphasis on supporting the primary sector, as well as to provide incentives for the creation of larger storage areas and silos for grain and cold storage chambers that meet the necessary food storage conditions, to increase the country's food storage capacity.
In order to pay these allowances, the State should request, together with the other Member States, the creation of a Special Fund with EU money to be given to the States to support households and businesses. At the same time, says the KEBE, the State should take advantage of the new EU decision to extend the period of application of the Stability Pact after 2023, which allows for fiscal relaxation, in order to support businesses and households.
The KEBE's view is that, as things develop, the main measures to be taken to deal with the effects of this new crisis will, as in the case of the pandemic, be mainly of a fiscal nature, it says.
In addition, the KEBE proposes measures of a horizontal nature. Specifically, it proposes that the issue of the minimum wage and the increase in the tariff not be raised for 2022, because it will further increase inflation.
It also proposes extending the timeframe of the State Guarantee Scheme to ensure liquidity while deleting the condition of "no staff redundancies" in order to support the additional liquidity needs of businesses. At the same time, it is proposed to increase State Guarantees to 90% from 70% as was done in most European countries.
It also proposes to impose reduced VAT rates on several product categories to reduce costs to businesses and citizens and to reduce additional taxes on energy while the price crisis lasts.
It also proposes to suspend instalments, as was done at the start of the pandemic.
In addition, the KEBE proposes the employment of Ukrainian refugees and the use of the legislative proposal adopted by the EU for the "Cohesion Action for Refugees in Europe", and suggests a decision at European level to reduce import duties from third countries and the general abolition of import duties on transport costs. The same is proposed for fish farmers, while it is proposed to cover the cost of fertilisers and pesticides for farmers. At the same time, it is proposed to provide tax incentives for the development of new agri-food investments that will increase both domestic food production and export potential.
For wholesale and retail trade, the KEBE says they are considered high energy consuming sectors and proposes to include them in the temporary framework of state aid for high energy costs in order to transfer the benefit to the retail prices of products. In addition, it is proposed to allocate a specific amount per means of transport to cover part of the increased fuel costs.
In the food sector in particular, it is proposed that the necessary flexibility be shown with regard to labelling requirements, without compromising food safety and proper consumer information.
The CCBE states that the issue of staff shortages persists in the retail and horeca sector and therefore proposes to consider requests for recruitment of staff from third countries.
The imposition of "price caps" on products should be done with particular care and sparingly, only in exceptional cases where there is a real tendency for profligacy, the KEBE notes, adding that the "cap" should be imposed on the percentage of profit and not on retail selling prices.
With regard to industry and exports, the KEBE calls for support for those export companies that have dealings with war-affected countries.
In addition, it calls for the creation of a subsidy scheme for the installation of renewable energy storage systems for suppliers who join the competitive market, so that they can offer cheaper electricity on a 24-hour basis.
The KEBE proposes to implement support schemes to boost export activity (participation in exhibitions), cover travel expenses for finding customers and cover the increased costs for digital advertising - digital marketing.
Implementation of a one-off scheme of partial subsidy of transport costs for a period of at least 3 months and support for employment in industry with schemes similar to the support for employment during the Cornflower period are other measures proposed by the Chamber.
Finally, it proposes to adopt a policy such that documented effects of war on the fulfilment of contractual obligations to the state should be taken directly into account for changing the terms in contracts. A similar policy has been adopted because of the effects of the pandemic.
In the construction sector, the CCBE proposes that prices for various materials should be revised frequently to reflect current prices and not cause losses to contractors, and that it should be possible to extend project deadlines by up to 8 months. It is also proposed to modernise public procurement.
In addition, the KEBE wants to abolish capital gains tax for a certain period of time for those who proceed to purchase real estate until the end of 2022, exemption from all or proportionate tax arising from the sale of real estate, provided that all or part respectively of the sale price is reinvested in the purchase of another property, extension of the time for carrying forward existing tax losses from 5 to 10 years and the possibility of refunding VAT on real estate used for rental purposes.
In order to keep rents at affordable levels, the KEBE proposes to provide incentives to young couples and young professionals to buy apartments instead of opting for the rental solution and to give incentives also to institutional/private investors to buy real estate properties with the commitment that they will rent them e.g. for a period of at least 10 years, in order to increase the supply of real estate.
In tourism, the KEBE proposes that electricity for hotels be put on the industrial tariff.
In addition, it reiterates the demand for the employment of foreign staff from third countries, while it calls for the reduction of VAT for tourism businesses from 9% to 5% and the reduction of airport charges.
It also proposes product diversification through targeted actions depending on the market and calls for new markets to be approached and/or an increase in tourist flows from existing markets with potential, with enhanced promotion.
Furthermore, it calls for the exemption of vehicle rental companies from the traffic license fee for 2023.
Finally, the KEBE proposes the refund or exemption of VAT payment for capital expenditure in sectors where there is potential for further development, such as Education, Medical activities, Research, etc.
Source: KYPE
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