images (8)’TO reform the revenue administration with the objective to reinforce the efficiency and effectiveness of revenue collection capacity and the fight against tax fraud and evasion, with a view to increasing fiscal revenue.’ This is part of the terms of the Cypriot bailout. With this in mind the Cypriot Government gave the go ahead to create a single body which will integrate both VAT and IRD (Inland Revenue Department), this comes as part of structural changes aimed at streamlining public administration, alongside strengthening the legal framework and simplifying procedures. Currently in discussion with an International Monetary Fund the ministry is hoping to submit a final draft for approval sometime next month. Referring to the new department as ‘having a positive impact on state revenues, mainly through the fairer distribution of tax burdens,’ The reforms are coming in two phases ‘short term’ and ‘long term’, the short term reforms are to be in place by the end of the year and will include, enacting legislation to enhance tax collection and voluntary compliance by attributing personal responsibility for payment of company taxes, harmonising legislation among tax types so that not paying taxes is a criminal offense, and strengthening powers by the tax authorities to ensure payment of outstanding tax obligations, by having the authority to seize corporate assets, and prohibiting alienation or use of assets, including property and bank accounts, by the taxpayer. The longer term reforms are to include risk management and the establishment of a new integrated function-based tax administration structure, integrating the existing IRD and VAT services. The Government also has plans to pass legislation changing the current pre-assessment verification of income tax returns to a post-assessment audit, selected on the basis of risk along with a joint audit program for large taxpayers, all to be conducted in 2014.