Cyprus MPs push back on bill raising levy to repay football club debts

Cypriot lawmakers this week called for major revisions or the withdrawal of a bill proposing to raise the current 1.5 per cent allocation of sports betting profits to football clubs to 3 per cent.

The bill, originally introduced by the Finance Ministry, has sparked concerns over potential state aid issues and fairness in tax debt repayment, leading to a heated debate during a meeting of the House Finance Committee on Monday.

The director of financial management of the central government directorate at the finance ministry, Lucy Herodotou Mouskou, clarified that the increased contribution to football clubs hinges on the condition of it being used to repay tax obligations.

Commissioner of State Aid Stella Michaelidou expressed her reservations, pointing out that the bill contains potential elements of state aid.

She also said that the bill should have had proper safeguards to ensure that any debts owed by football clubs are indeed repaid.

Michaelidou mentioned that she only became aware of the bill through publications and promptly sent a letter to the Finance Ministry, urging them to formally consider her views.

Furthermore, Michaelidou stressed the importance of a proper and sensible assessment of the football clubs’ ability to pay back their debts.

She cautioned that it must not inadvertently be communicated to clubs that there is tolerance for tax debt issues.

On the other hand, the Cyprus Sports Organisation (KOA) welcomed the increased contribution, and that the funds will appropriately reach the football clubs, after being briefed on the matter by the Cyprus Football Association (CFA).

A representative from the CFA informed the committee that under this new arrangement, the clubs would finally receive what they “rightfully deserve in return for their contributions to the betting industry”.

However, the bill was not without its critics. Disy MP Onoufrios Koulla voiced his disapproval, calling it paradoxical to raise taxes just to pay off football clubs’ debts.

He argued that while Disy supports an increase in the allocations clubs received, they opposed any misuse of the funds.

According to Koula, only clubs that meet their financial obligations should benefit from the levy.

Akel MP Aristos Damianou didn’t mince his words either, describing the bill as something that “violates good administration”.

He urged the government to withdraw what he saw as an ‘unacceptable piece of legislation’.

Fellow Akel MP Christos Christofides echoed this stance, saying that the bill was designed to serve a select few who are currently in debt.

Elam MP Sotiris Ioannou also criticised the proposal, saying that “it is flawed in its conception”.

He added that while there should be support for clubs, the bill shouldn’t be used to cover up tax liabilities.

House Finance Committee chair Christiana Erotokritou drew attention to the importance of taking the concerns of the State Aid Supervisor seriously.

She stressed that the bill needed further amendments, adding that it is not acceptable to increase the levy to cover outstanding tax liabilities.

Finally, Greens’ MP Stavros Papadouris expressed his surprise that the bill was found to entail issues related to state aid, since there were previous reassurances that this would not be the case.