New Tax Bills Rejected - Parliament
Parliament has rejected new proposals for increases in corporate and property taxes in a move described by Finance Minister Charilaos Stavrakis as negative for the economy.
"We cannot put the economy on auto-pilot," said Stavrakis, who is faced with the task of halving the government deficit-to-GDP ratio by 2012.
The European Union has given Cyprus a deadline of 2012 to reduce its deficit to under three percent from six percent currently.
The finance ministry had proposed an increase in corporate tax from 10 percent to 11 percent and a re-evaluation of property tax from 1980 value levels to current value levels.
Meanwhile, the government slashed 400 public sector jobs in efforts to save 10 million euros this year, while MPs agreed to a 10 percent wage cut amounting to savings of around 100,000 euros per year for two years.