KISOS recommeds abolishing stock exchange duty

KISOS, the Social Democrat Movement, yesterday proposed the abolition of the stock exchange duty and its replacement with a capital gains tax system, which would impose taxes ranging from 0% to 15%. KISOS MP Doros Theodorou submitted the proposal before parliament. According to the term of his proposal, the taxation on gains generated through the sale of securities should be imposed as follows:
• 0% for annual gains of up to CYPŁ5000.
• 5% for annual gains of between CYPŁ5001 to CYPŁ20000.
• 10% for annual gains of between CYPŁ20001 to CYPŁ50000.
• 15% for annual gains exceeding CYPŁ50001.

KISOS has repeatedly voiced the view that the abolition of the capital gains tax in favour of the stock exchange duty has been a mistake, a view that is now also shared by political party DISY.

MPs recently expressed these views before Finance Minister Takis Clerides who said it was up to parliament to make a decision. He suggested that the taxation system could be reviewed, as long as the political parties agreed to its amendment, adding that the decision to replace the original capital gains system with the stock exchange duty had also been a parliamentary initiative.

The government has also made it known that if the taxation system changes, it would include provisions benefiting long-term stock market investors in an effort to help boost stock market activity. KISOS recommends that the new taxation system become effective from January 1, 2001.