Nicosia planning to introduce tax amnesty

Cyprus will introduce a tax amnesty to lure back funds concealed from authorities abroad, but only for individuals making long-term investments or buying government bonds, authorities said on Thursday.

The amnesty will be valid until December 31, government spokesman Christos Stylianides told reporters.

“It will not be a blanket amnesty, because the government is very sensitive to issues of tax evasion,” he said.

Under terms of legislation to be drafted for approval, individuals who repatriate cash for investments, government bond purchases or long-term bank deposits, or to repay debts, will be exempted from income tax.

Stylianides could not give an estimate on how much money was believed to be stashed abroad.

“We are in a difficult economic crisis and we need liquidity,” he said.

Cyprus required a 10-billion-euro bailout from international lenders in March to prop up a banking sector crippled by losses from lending to Greece and to plug big fiscal deficits.

A condition of aid was seizing billions in bank deposits in two major banks which required recapitalizing, the first time savers have been directly targeted in the eurozone crisis. [Reuters]