Finance ministry urges football clubs to settle €35.6m in debt
The finance ministry on Tuesday sent a letter to football clubs participating in the debt repayment scheme, urging them to settle their debts to the state, totalling €35.6 million, which were accumulated from July 2007 to March 2023.
Recently, the tax department sent a letter to the Cyprus Football Association (CFA), urging it to remind top-tier football teams to comply with the provisions of the latest government scheme established in May 2023. The clubs are required to pay their instalments, clear previous debts to the state, and submit their tax returns.
The current scheme allows for the inclusion of overdue tax liabilities from April 1, 2021, to March 31, 2023, without offering additional relief in the form of interest and penalties. Furthermore, the repayment period for these debts has been reduced from 180 to 168 instalments.
A critical condition for these concessions is that clubs must not incur new debts, as doing so would disqualify them from the scheme.
Of the €35.6 million owed to the state by the clubs, €33.1 million relates to the period before 2021, and based on the previous government’s decision, no interest or penalties are imposed on these debts due to a freeze that had been implemented.
Previously, debts amounting to €10 million were also written off. In contrast, new debts incurred by clubs after April 2021 are subject to interest and penalties.
In late August, Finance Minister Makis Keravnos vented the possibility of submitting a bill to parliament which would increase taxes on takings by betting shopsand then increase the amount paid to the Cyprus Football Association (CFA) from 1.5 per cent to three per cent.
The proposal was eventually sidelined following significant opposition from various political parties.
The latest report from the Audit Office outlined the total debts of football clubs, both to the tax department and social insurance, amounting to €35 million. The total liabilities of clubs from July 2007 to March 2023, according to the finance ministry, were €35.6 million, with €2.4 million attributed to new debts incurred after the introduction of the repayment scheme.
The ministry also submitted a new document to parliament detailing the names of the football clubs, the total debts owed to the state and the new debts they have accumulated. It also includes the amounts each club must pay monthly.
Apoel had total debts of €13.7 million as of March 2023, with €671,000 incurred from April 2021 to March 2023. Under the repayment plan, Apoel is required to pay approximately €82,000 monthly to the state.
Omonia’s total debts stood at €5.3 million as of March 2023, and the club did not incur additional debts under the new plan, needing to pay €32,000 monthly.
Ael reported total debts of €4.5 million in March 2023, with €322,117 attributed to the period between April 2021 and March 2023, requiring monthly payments of €26,920. Apollon had total debts of €4.1 million, comprising €3.3 million in old debts and €783,000 in new debts from April 2021 to March 2023, with a monthly instalment set at €24,740.
Anorthosis Famagusta owed €4 million as of March 2023, with €88,545 relating to debts from April 2021 to March 2023, requiring monthly payments of €24,198. Ethnikos Achnas reported total debts of €1.15 million, with €37,430 incurred after the introduction of the new plan, requiring monthly payments of €6,887.
Aris Limassol’s debts totalled €477,371, with €18,000 from the 2021-2023 period, requiring a monthly payment of €2,841, while Nea Salamina’s total debts were €409,019, also without new liabilities, necessitating a monthly payment of €2,434.
Paphos FC reported total debts of €74,382, including €303,365 from the 2021-2023 period, requiring monthly payments of €442.75.
Aek Larnaca, Karmiotissa, and Aez Zakakiou reported no tax liabilities as of March 2023, according to the finance ministry’s document.