The Parliamentary Finance and Budget Committee met in session today, Monday, 4 April 2022, and discussed the following matters:
1. The Income Tax (Amendment) (No. 5) Act, 2021.
(No. Fak. 23.01.062.088-2021)
The committee continued discussion of the above bill, the purpose of which is to amend existing law to introduce clear provisions to allow the acquiring credit union to use the special tax credits or the cleared refundable amount (RAC), as defined in section 9D of the Income Tax Act, to pay the annual guarantee fee. In addition, it is provided that the guarantee fee paid annually by the credit institution to the State will be determined by the Minister of Finance with a minimum and maximum limit.
During the debate, a revised draft bill was considered, according to which the wording providing for the possibility for the Minister of Finance to determine the amount of the aforementioned annual fee, which will be paid for each tax year from 2022 onwards, instead of from 2018, as originally proposed, is improved, since the requirement According to officials, credit institutions have already made provisions in respect of previous years, which may become due under the proposed regulations.
All stakeholders agreed with the revised text of the bill. The Committee, on the basis of discussions at the meeting, requested a revised text of the Bill, as well as additional information in relation to the issues raised, and will review the matter at its next meeting.
2. a. The Open-ended Collective Investment Schemes (Amendment) (No. 2) Act, 2021
(File No. 23.01.062.165-2021)
b. The Alternative Investment Entities (Amendment) Act, 2021
(Fak. No. 23.01.062.166-2021)
The Committee began discussion of the above bills, the purpose of which is to amend the respective basic laws to enable the CySEC (CySEC) to extend deadlines in cases where conditions prevailing in the Republic affect the ability of CySEC regulated entities to comply with any of the deadlines set out in the respective basic laws.
The Committee was informed by the competent persons that the proposed law provides flexibility to the CySEC to extend deadlines set out in the relevant legislation for a period of six months, renewable every six months, due to exceptional circumstances that may arise. Members of the Committee pointed out that the proposed regulations should be applied horizontally to all those concerned and, in this respect, the relevant decisions of the CySEC should be published in the Official Gazette, while the period for which the extension is granted should be specified.
On the basis of the above, the Committee asked the competent bodies to review the provisions of the draft law and submit a revised text to the Committee, on which the discussion will continue at the next meeting. The Credit Institutions Operations (Amendment) (No. 2) Act, 2021.[/B]
(No. Fak. 23.01.062.097-2021)
The Committee commenced debate on the above Bill, which seeks to enable the Central Bank of Cyprus (CBC) to require legal persons applying for a licence to operate as a credit institution to pay to the CBC the costs associated with the examination of their application.
The representative of the CBC stated that the recovery of costs relating to administrative costs is a practice that is also applied in other cases involving credit purchasing companies, electronic money institutions and payment institutions. With the implementation of the proposed law, the CBC would be able to issue guidance on the cost-effective determination of such costs and their payment.
The Committee asked for evidence on the practice followed by other Eurosystem Member States in relation to this issue and would continue the discussion of the draft law at its next meeting.
4. The Credit Institutions Operations (Amendment) Act, 2022.
(No. Fak. 23.01.063.009-2022)
The Committee began discussion of the above bill, the purpose of which is to harmonize national legislation with Article 12 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.
The competent representatives stated that the proposed regulations reinstate a provision of that Directive, which was inadvertently replaced at the stage of prior harmonisation with another European Directive, concerning the determination of initial capital for the authorisation of the opening of a credit institution.
The Committee decided to take a position on the bill at its next meeting.
5. The Control of Liquid Assets Entering or Leaving the European Union and the Exercise of Intra-EU Controls on Liquid Assets Act of 2021
(Doc. No. 23.01.062.127-2021)
The Committee began discussion of the above bill, which seeks to adopt regulations to implement Regulation (EC) No. 1672/2018 of the European Parliament and of the Council of 23 October 2018, on controls on cash entering or leaving the European Union, and arrangements for controls on cash entering or leaving the Republic from/to another Member State. The Committee decided to take a position on the bill at its next meeting.
6. Decommitments and exceptions to the prohibition on filling vacancies
The Committee considered a number of requests for decommitments and exceptions to the prohibition on filling vacancies. The decommitments concern:
a. the Ministry of Finance,
b. the Ministry of State for Research, Innovation and Digital Policy,
c. the Office of the Commissioner for Children's Rights,
d. the Presidency and the Presidential Palace,
e. the General Accounting Office,
f. the Deputy Ministry of Social Welfare,
g. the Ministry of Energy, Trade and Industry,
h. the Ministry of Justice and Public Order,
i. the Ministry of Defence.
The exceptions to the ban on filling vacancies concern:
a. the Audit Service,
b. the Deputy Ministry of Tourism.
Secretariat of the Parliamentary Committee on Finance and Budget Email:parliamentary-committees@parliament.cy
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