FinancialMirror.com
November 14 - 20, 2012
6 | OPINION
2013: crisis or challenge for tourism? EDITORIAL 2013 year will be a difficult year for tourism arrivals from Britain and our own officials seem perplexed over what to do in order to revive our best market of holidaymakers to date. But as the Chinese saying goes, the two characters that make up the word for “crisis” represent “danger” and “opportunity.” If we are facing the danger that our traditional and primary tourist market is falling, then let’s look at the opportunities that lie ahead of us. It is ironic that our tourism officials made the disheartening statements during the ‘World Travel Market’ exhibition in London, where so many other new holiday concepts and travel trends were being promoted. Perhaps, a few notes out of the WTM Global Trends
Report for 2012 ought to do the trick. Americans: countries previously off-limits to tourists from the U.S. have become open, benefiting economically from tourism revenue. What can Cyprus do to attract the Los Americanos? Shopping: big spenders from the BRICS nations (Brazil, Russia, India and China) are flaunting their newlyfound wealth and are embracing shopping tourism in key European destinations. The Russians are coming to Cyprus, while we have not seen any Chinese yet. With so many shops displaying international brands, high quality jewellery and premium cars, surely we can get a package together? Shopping Hotels: if we can’t build the type of dazzling hotels and mega-malls that are all popping up over the Middle East, surely we can promote our other premium facilities, such as the competition-level golf course and our new marinas?
Cyollywood: Nigeria’s massive film industry, dubbed Nollywood, is now the world’s second largest in volume, after India’s Bollywood and ahead of Hollywood, with more than 2,000 films produced annually. How about attracting some major studios to film their disaster movies or reallife “Pirates of the Mediterranean” films in Cyprus? On a more serious note, the abundance of archaeological sites and specialist tours in Byzantine treasures could still be better utilised. Digital Detox: at a time when people are trying to kick their addition to mobiles, tablets and digital mobility, Cyprus should promote its relaxed way of life, with beaches-to-mountains trips, wine tours and trips down the beaten village track. But to do all this, the Cyprus Tourism Organisation has to fight to increase its marketing budget, something it has avoided in recent years, as a result of which we are now suffering the consequences as a second-grade destination.
Banks open dialogue in property misselling At long last there is real hope for thousands of people following a “gesture of goodwill” by Alpha Bank to lighten the burden on borrowers who have fallen into arrears by offering them a repayment moratorium due to the economic downturn, according to an activist for property rights. During a meeting held at the bank’s Head Office in Nicosia last month with George Kounis, Consultant with London solicitors Maxwell Alves, the bank expressed the desire to have a dialogue with all concerned borrowers and confirmed its readiness to resolve matters in an amicable way. Other banks are expected to follow suit. “We have argued all along that there is no point in going head-to-head with the banks,” said Kounis. “Litigation is not the answer. Banks will listen to reason. We are now in the process of submitting settlement proposals to Alpha Bank for each and every borrower we represent. We do believe the banks will settle.” The battle, however, is not over. Even if the banks write-off substantial amounts from these debts, there is a lot that needs to be fixed in order to give these borrowers a fair chance of keeping or selling these properties, said Kounis. Properties have been sold with rent guarantees that were not honoured, amenities such as a golf course or a spa that never materialised and there are numerous other irregularities. Banks can help by funding and putting pressure on developers but they cannot fix everything.
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The government can do a lot by diverting cash buyers, particularly from China, to purchase completed properties instead of pushing them to off-plan sales. “We believe that this is a mistake. They need to clear the existing stock of properties if ghost complexes are to be eliminated and prices start picking up again,” Kounis added. The government must in any event eliminate the misselling environment. “If developers were forced to have separate title numbers for each unit in a development before they were even allowed to commence sales, if they needed the same licence as estate agents to sell property so that they could lose it if they missold, if unlicensed sales agents and financial advisers felt the full force of the Law, if lawyers were properly disciplined and if banks were properly supervised, misselling would disappear overnight,” George Kounis declared. Maxwell Alves have written to various bodies in Cyprus
following up on these issues including the Central Bank of Cyprus, the Cyprus Bar Association, the Attorney General, the Securities and Exchange Commission and the Minister of Interior. In particular, they have formally complained to the Competition and Consumer Protection Service (CCPS) at the Ministry of Trade which ultimately is the authority that needs to co-ordinate and enforce action against rogue traders, but the CCPS will not act despite the fact that it is their duty to do so under the provisions of the EU Directive on Unfair Commercial Practices which Cyprus incorporated into Law (103(1)/2007). “Cyprus must decide whether it wishes to be in the EU in both body and spirit. They cannot use the European logo to attract investors and then treat them as if they are in an eastern bazaar when they try to complain,” concluded George Kounis. “We hope to persuade the authorities otherwise we will report the failure to implement to the EU Commission”.
Five proposals for property taxation l
The state can guarantee its revenue, without “suffocating” the market
We are all anxiously observing the thoughts and proposals immovable property tax, resulting in many companies being that are being submitted by the government’s economic team led to closure and unemployment rising even more. For these reasons, we are suggesting the following: to the Troika (EU, ECB, IMF) in relation to property taxation. We fully comprehend the state’s need to guarantee or even l Reducing the taxable threshold for local property tax from increase its revenue, to correspond to its lenders’ needs and €120,000 to €40,000, but the tax rate does not exceed 8%. demands; however, this should not l The tax should be based on each be done in a way that will work as a By LAKIS N. TOFARIDES property separately and not cumulacounterincentive for growth or tively (meaning that each property has acquiring immovable property. its own tax). President of the International We are convinced that the pro- Real Estate Federation – l A property that has been sold (subposed tax measures will further harm FIABCI-Cyprus Chapter mission of deeds to the Land Registry the economy’s growth and especially Office) should include the buyer’s tax one of its main pillars, the property return. sector, which has already been affected more than any other l A special taxing regime should be created for land developarea of economic activity. Tens of thousands of people are ment and construction companies, for projects that are under employed in the real estate sector, while it is inextricably con- development. nected to many other professions which are also facing signif- l The building factor should increase to cover the property’s icant survival problems due to reduced turnover in the prop- mortgage value. erty market and land development. All these should be accompanied with a permanent reduction Imposing high tax rates on immovable property will be cat- in the tax imposed when property is being acquired. astrophic for the sector. Companies are already faced with a If mistakes, as well as rushed or easy solutions, are avoided, drastic reduction in the value of land they have available for the property sector can regain its position as the Cypriot econodevelopment, while at the same time, they are not able to my’s workhorse, contributing to the state’s revenue and openimplement planned projects, due to difficulties in securing ing new job positions for thousands of workers, but also reinfunding from the banks. With the proposed taxing measures, forcing the country’s effort to attract capitals and investments they will be asked to pay huge amounts, in the form of from abroad.
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