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article imageCyprus to tweak bank tax levy to protect deposits under €20,000

By Katerina Nikolas     Mar 19, 2013 in World
Nicosia - The controversial proposal to levy taxes on government guaranteed bank deposits of less than €100,000 looks to be scrapped even before it is voted on by the Cypriot parliament, as a draft bill proposes excluding deposits of less than €20,000.
The Telegraph reports that a draft bill is to be presented to parliament to exclude deposits of less than €20,000 from the pending tax levy. The draft proposal would still leave deposits of between €20,000 and €100,000 subject to a tax levy of 6.75 percent, with deposits in excess of €100,000 plundered by a tax levy of 9.9 percent.
IMF chief Christine Lagarde is in favour of the latest measure.
According to DW Eurogroup ministers have been pushing for protection for savers with smaller deposits. Eurogroup president Jeroen Dijsselbloem said "Eurogroup continues to be of the view that small depositors should be treated differently from large depositors and reaffirms the importance of fully guaranteeing deposits below 100,000 euros."
To levy any tax on deposits of less than €100,000 makes a mockery of the government guarantee deposit insurance scheme and would set an alarming precedent.
More about Cyprus, Cyprus tax levy, Cyprus government deposit insurance scheme, eurogroup, Christine Lagarde
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