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Higher tax on deposits in Cyprus is legalized theft - opinion

15:45 25/03/2013

NICOSIA, March 25 - RAPSI. The proposed bailout tax on bank accounts in Cyprus is "legalized theft," which contradicts international agreements and will be contested, Yury Pyanykh, the president of the Association of Russian Businessmen in Cyprus, told RIA Novosti.

"This is legalized theft," he said. "It contradicts fundamental international agreements. If they approve this measure, I can only imagine the number of lawsuits that will be filed and won."

Pyanykh pointed out that a final decision on the size and the nature of the deductions has not yet been taken. For example, it is unclear if the measure will only concern Cypriot banks, or also foreign banks operating in the republic.

The businessman said the decision to levy an additional tax on bank deposits will also affect Cyprus's image as a favorable site for incorporation.

"It will not affect Cyprus as a country with a warm sun, fresh air and clear water, but the incorporation issue is closely connected (with the financial sector)," he said.
He added that deducting money from bank deposits is like stealing from a safe deposit box or a hotel safe.

"Panicking, you tell the hotel management that someone has opened your safe and stolen your money," he said. "But they tell you not to worry because the hotel has financial problems and the management has decided to put a levy on each client. I wonder if you would ever stay at that hotel again."

The government in Nicosia has proposed to levy a 20% tax on depositors with over 100,000 in their accounts in the Bank of Cyprus. A levy that was already rejected would have taken 6.75% from small savers and 9.9% from larger investors in all banks.

On Sunday, the Bank of Cyprus, the island's biggest lender, limited cash machine withdrawals to 120 per day. The second biggest lender, Laiki, lowered its daily limit to 100 from the previous limit of 260 per day.

In a last-ditch deal with international lenders, Cyprus will shut down the Popular Bank of Cyprus, also known as Laiki, and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion ($13 billion) bailout.

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Higher tax on deposits in Cyprus is legalized theft - opinion

15:45 25/03/2013 The proposed bailout tax on bank accounts in Cyprus is "legalized theft," which contradicts international agreements and will be contested, Yury Pyanykh, says the president of the Association of Russian Businessmen in Cyprus.
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