Cyprus | Posted:

Ever since representatives from the trio of international lenders arrived on the island to look into the fragile state of our economy and how it can recover, all the ills and failures of Cyprus are blamed on the “blood-thirsty” Troikans. In actual fact, all they have done is tell us truths about our poor handling of the economy and public funds, as we have not ensured how our finances (state and private sector) could become sustainable.

Warnings have come and gone, a lot has been said about privatisation and competitiveness of the “Cyprus” brand in general.

In their own wisdom, the Troikans, as well as market watchers such as the rating agencies that determine whether Cyprus is financially reliable (and not just viable), have disregarded the future oil and gas revenues, perhaps because of the lag with which we will see earnings pouring in, estimated at no sooner than 2018.

Instead, they told Cypriots, who are known for being entrepreneurial, to return to the glory days of the services-based economy when the island’s gross national product came from tourism, trade and shipping, and to a lesser extent the legal and financial services sectors. In the latter category, Cyprus can be as competitive (or not) as the next jurisdiction, but what the Troikans have rightly told us to focus on is the tourism sector and shipping, where our reputation remains unblemished.

In the case of tourism, however, our lenders, who want to see a return on their investment some day, have urged all stakeholders – government officials, operators, trade unions – to ensure that the Cyprus hospitality industry sector becomes and remains sustainable. There is a clear lack of vision as to where our tourism industry is headed and seeing as we couldn’t decide for ourselves, they told us clearly: bring the cost down.

Perhaps some idiot in government has not realised that in order to bring the cost down, hotel companies and hoteliers have to reign in their labour wages, buy goods and services at lower prices (but not inferior quality), but most importantly keep their tax bill to the minimum.

It is incomprehensible how the property tax on hotels has shot up from 0.4% to nearly 2% of the value, and how all other stakeholders (CTO, parliament, etc.) have failed to drum up support for the hoteliers, who are now faced with an additional levy for 2013 and which has to be paid by October, not least to pay for the over-inflated salary of the civil servant who came up with this stupid plan in the first place.

At a time when Cypriot tourism officials have failed miserably to attract fresh visitors either for summer or the extended winter season, taxing the hotels further is like the final nail in the coffin.

How on earth can Cyprus become a competitive destination if idiots keep taxing the hotels with new levies and nincompoops in the Finance Ministry or parliament cannot see that this is gravely wrong?

SOURCE - Financial Mirror