NICOSIA: Cyprus' Central Bank governor said Saturday that he opposes a government plan to tax bank deposits aimed at shoring up the island's fiscal deficit. Athanasios Orphanides said the plan would weaken Cyprus' large financial sector and increase risk amid continuing instability in the eurozone and in light of the island's recent credit grade cuts. "Imposing taxes on banks will further increase the pressure and costs faced by the banking sector and by extension the cost of borrowing in all other sectors of economic activity," Orphanides said in an article in the Politis daily. The government is proposing a two-year 0.05 percent tax on commercial bank deposits over €100,000 and is projected to raise €120 million ($170 million). Some €70 million would go into state coffers and the remainder into bank stability fund.
