Significant Revenue Losses for Cyprus Due to Misapplied Agreements and Delays, Auditor General Claims

Significant Revenue Losses for Cyprus Due to Misapplied Agreements and Delays, Auditor General Claims

Cumulatively, 35 Million Euros Have Been Lost Because of the Legislation From 2018 Not Being Implemented

According to Odysseas Michailidis, the Auditor General, Cyprus has suffered revenue losses that could amount to tens or even hundreds of millions of euros. This is attributed to both the misapplication of the 2003 interstate agreement governing the operation of OPAP in Cyprus, and the delay in implementing the legislation passed by the Parliament in 2018 for certain gambling games. This legislation, although approved, hasn't been enacted by the Ministry of Finance.

Addressing the Parliamentary Audit Committee, Mr. Michailidis pointed out that there's a monthly loss of 1 million euros due to the improper enforcement of the 2003 agreement. Cumulatively, 35 million euros have been lost (7 million annually) because of the legislation from 2018 not being implemented. Moreover, between 2011 and 2021, OPAP benefited by a total of 29.63 million euros. This figure excludes the years 2014-2015 and refers to the calculation of notional, rather than actual, profits post-ticket selection.

Furthermore, the Auditor General noted that while OPAP's revenue increased from €38 million in 2001 to approximately €225 million in 2021, the Republic's collections from OPAP started at €13 million in 2001, remained around that figure until 2013, and slightly increased to €15.6 million in 2022.

He also discussed the 2017 opinion from the then Attorney General regarding the application of the 2003 agreement. This interpretation was fundamentally not implemented by the then Chief Accountant. However, it was overturned by a new interpretation from the current Attorney General on July 20, 2021, clarifying the interstate agreement, thus eliminating concerns of lost revenue.

The aforementioned issues were discussed during the examination of the 2020 Audit Service Report on the Republic's Chief Accountancy by the Committee on Thursday. Both the Auditor General and the new Chief Accountant of the Republic, Andreas Antoniadis, were present.

Regarding the 2018 legislation intended to regulate OPAP's operations, the Audit Service's report mentions, "Despite more than four years passing since the Certain Gambling Games Law was approved, the selection process for an appropriate provider hasn't been completed, resulting in no relevant contract being signed to date." As Odysseas Michailidis stated, this has caused OPAP to still use the "2003 Cyprus-Greece interstate agreement" for calculating payments to the state, leading to significant public revenue losses.