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Sunday, August 21, 2011
NICOSIA – Anatolia News Agency

Turkish Cypriots are not investing for future generations but rather sparing 82.2 percent of their budget for salary payments and similar expenses, according to Turkish Ambassador to Nicosia Halil İbrahim.

“Residents of Turkish Cyprus are not making the necessary investments for future generations. On the contrary, they are indebting the latter for the sake of their current expenditures,” read the 2010 Annual Report on the public finances of northern Cyprus prepared by Turkey’s Aid Committee led by the Turkish ambassador.

Turkey created 1.1 billion Turkish Liras of resources for North Cyprus in 2010, of which 851 million went to the latter’s budget whereas the remaining 249 million went to direct payments to people employed in the public sector, without the money being included in the Treasury.

Of the 851 million liras Turkey contributed to Turkish Cyprus’ budget last year, 475 million liras were used to close the budget deficit and the remaining 376 million liras for investment, defense and support for the real sector. This amount counted for 32.2 percent of Turkish Cyprus’ total budget.

Turkey cut its contributions to the northern part of the divided island by 8.7 percent in 2010, mostly because of the sharp increases in the latter’s budget deficit in 2008 and 2009.

The positive environment created in Turkish Cyprus in 2004 due to political developments started to decrease in 2007 and became much worse after 2008’s global economic crisis, according to the report.

Unlike the majority of countries around the globe that took measures to face the 2008 crisis, Turkish Cyprus failed to take any measures to provide fiscal discipline. On the contrary, fiscal arrangements that damaged fiscal discipline were made, as the country moved toward the general elections.

The growing 2008 budget deficit kept worsening in 2009 as well, as the newly appointed government that started its mandate 2009 went for another general election in the following year, the report reads.

The report also said tax rates on alcohol drinks, personal cars, cigarettes, fuel oil, gambling and casinos, and employees’ income were increased in the second half of 2010 within the framework of fiscal measures. The withholding tax rate on deposit savings and gambling games was also raised, according to the report.

Meanwhile, value-added tax rates were reviewed and the rate was cut from 7 to 5 percent. The tax application on “super pensions” of retired persons, on the other hand, halted following a cancellation by the Constitutional Court in January. Such a decision gave way to a large fall in tax revenue, which was estimated to reach some 250 million liras.

Fight against informality

The measures aiming to increase public revenues were also accompanied by measures focused on the development of monitoring mechanisms to fight against transactions in the informal economy, the report said.

It was found that recordings of purchases with credit cards did not match tax statements by companies, which showed that the black market in Turkish Cyprus was larger than thought to be.

Regarding the expenditures side of the budget, staff recruitment remained within limits. Meanwhile, support for agriculture remained as part of the budget and a part of debts from previous years were also paid back in 2010.

Measures regarding working hours remained ambiguous and even insufficient as an increase in working hours per week to 39 by law was cut to 36.5 hours per week in practice, after accounting for administrative permissions, the report said.

http://www.hurriyetdailynews.com/n.php? ... 2011-08-21

[Pyrpolizer]

Sunday, August 21, 2011
NICOSIA – Anatolia News Agency

Turkish Cypriots are not investing for future generations but rather sparing 82.2 percent of their budget for salary payments and similar expenses, according to Turkish Ambassador to Nicosia Halil İbrahim.

“Residents of Turkish Cyprus are not making the necessary investments for future generations. On the contrary, they are indebting the latter for the sake of their current expenditures,” read the 2010 Annual Report on the public finances of northern Cyprus prepared by Turkey’s Aid Committee led by the Turkish ambassador.

Turkey created 1.1 billion Turkish Liras of resources for North Cyprus in 2010, of which 851 million went to the latter’s budget whereas the remaining 249 million went to direct payments to people employed in the public sector, without the money being included in the Treasury.

Of the 851 million liras Turkey contributed to Turkish Cyprus’ budget last year, 475 million liras were used to close the budget deficit and the remaining 376 million liras for investment, defense and support for the real sector. This amount counted for 32.2 percent of Turkish Cyprus’ total budget.

Turkey cut its contributions to the northern part of the divided island by 8.7 percent in 2010, mostly because of the sharp increases in the latter’s budget deficit in 2008 and 2009.

The positive environment created in Turkish Cyprus in 2004 due to political developments started to decrease in 2007 and became much worse after 2008’s global economic crisis, according to the report.

Unlike the majority of countries around the globe that took measures to face the 2008 crisis, Turkish Cyprus failed to take any measures to provide fiscal discipline. On the contrary, fiscal arrangements that damaged fiscal discipline were made, as the country moved toward the general elections.

The growing 2008 budget deficit kept worsening in 2009 as well, as the newly appointed government that started its mandate 2009 went for another general election in the following year, the report reads.

The report also said tax rates on alcohol drinks, personal cars, cigarettes, fuel oil, gambling and casinos, and employees’ income were increased in the second half of 2010 within the framework of fiscal measures. The withholding tax rate on deposit savings and gambling games was also raised, according to the report.

Meanwhile, value-added tax rates were reviewed and the rate was cut from 7 to 5 percent. The tax application on “super pensions” of retired persons, on the other hand, halted following a cancellation by the Constitutional Court in January. Such a decision gave way to a large fall in tax revenue, which was estimated to reach some 250 million liras.

Fight against informality

The measures aiming to increase public revenues were also accompanied by measures focused on the development of monitoring mechanisms to fight against transactions in the informal economy, the report said.

It was found that recordings of purchases with credit cards did not match tax statements by companies, which showed that the black market in Turkish Cyprus was larger than thought to be.

Regarding the expenditures side of the budget, staff recruitment remained within limits. Meanwhile, support for agriculture remained as part of the budget and a part of debts from previous years were also paid back in 2010.

Measures regarding working hours remained ambiguous and even insufficient as an increase in working hours per week to 39 by law was cut to 36.5 hours per week in practice, after accounting for administrative permissions, the report said.

http://www.hurriyetdailynews.com/n.php? ... 2011-08-21

What worries me is that even if we ever agree on a BBF the TC constituent state will not be able to survive economically with all those public servants. Who is going to pay for all this??? Turkey?

[CBBB]

Sunday, August 21, 2011
NICOSIA – Anatolia News Agency

Turkish Cypriots are not investing for future generations but rather sparing 82.2 percent of their budget for salary payments and similar expenses, according to Turkish Ambassador to Nicosia Halil İbrahim.

“Residents of Turkish Cyprus are not making the necessary investments for future generations. On the contrary, they are indebting the latter for the sake of their current expenditures,” read the 2010 Annual Report on the public finances of northern Cyprus prepared by Turkey’s Aid Committee led by the Turkish ambassador.

Turkey created 1.1 billion Turkish Liras of resources for North Cyprus in 2010, of which 851 million went to the latter’s budget whereas the remaining 249 million went to direct payments to people employed in the public sector, without the money being included in the Treasury.

Of the 851 million liras Turkey contributed to Turkish Cyprus’ budget last year, 475 million liras were used to close the budget deficit and the remaining 376 million liras for investment, defense and support for the real sector. This amount counted for 32.2 percent of Turkish Cyprus’ total budget.

Turkey cut its contributions to the northern part of the divided island by 8.7 percent in 2010, mostly because of the sharp increases in the latter’s budget deficit in 2008 and 2009.

The positive environment created in Turkish Cyprus in 2004 due to political developments started to decrease in 2007 and became much worse after 2008’s global economic crisis, according to the report.

Unlike the majority of countries around the globe that took measures to face the 2008 crisis, Turkish Cyprus failed to take any measures to provide fiscal discipline. On the contrary, fiscal arrangements that damaged fiscal discipline were made, as the country moved toward the general elections.

The growing 2008 budget deficit kept worsening in 2009 as well, as the newly appointed government that started its mandate 2009 went for another general election in the following year, the report reads.

The report also said tax rates on alcohol drinks, personal cars, cigarettes, fuel oil, gambling and casinos, and employees’ income were increased in the second half of 2010 within the framework of fiscal measures. The withholding tax rate on deposit savings and gambling games was also raised, according to the report.

Meanwhile, value-added tax rates were reviewed and the rate was cut from 7 to 5 percent. The tax application on “super pensions” of retired persons, on the other hand, halted following a cancellation by the Constitutional Court in January. Such a decision gave way to a large fall in tax revenue, which was estimated to reach some 250 million liras.

Fight against informality

The measures aiming to increase public revenues were also accompanied by measures focused on the development of monitoring mechanisms to fight against transactions in the informal economy, the report said.

It was found that recordings of purchases with credit cards did not match tax statements by companies, which showed that the black market in Turkish Cyprus was larger than thought to be.

Regarding the expenditures side of the budget, staff recruitment remained within limits. Meanwhile, support for agriculture remained as part of the budget and a part of debts from previous years were also paid back in 2010.

Measures regarding working hours remained ambiguous and even insufficient as an increase in working hours per week to 39 by law was cut to 36.5 hours per week in practice, after accounting for administrative permissions, the report said.

http://www.hurriyetdailynews.com/n.php? ... 2011-08-21

What worries me is that even if we ever agree on a BBF the TC constituent state will not be able to survive economically with all those public servants. Who is going to pay for all this??? Turkey?

We have quite a few of our own that WE can't survive with!

[gardash]

I have been warning of this for a long time.
East Germany nearly bankrupted West Germany after reunification and they are still paying to this day.

Be careful what you wish for!

[Maximus]

I have been warning of this for a long time.
East Germany nearly bankrupted West Germany after reunification and they are still paying to this day.

Be careful what you wish for!

Cyprus's wishes she was a few euro's behind Germany.

[gardash]

I have been warning of this for a long time.
East Germany nearly bankrupted West Germany after reunification and they are still paying to this day.

Be careful what you wish for!

Cyprus's wishes she was a few euro's behind Germany.

It was only the strength of West Germany's economy that stopped them from going under. It has taken until now for them to pull back to where they were. G.Cyprus isn't in a position to carry T.Cyprus, it is hardly paying it's own way now without giving the TCs a piggy-back for the next 15 years.