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Originally published Tuesday, March 12, 2013 at 2:17 AM

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Cyprus to accept corporate tax hike in bailout

A senior Cypriot official says the country is likely to accept raising its corporate tax from 10 to 12.5 percent as part of an international bailout deal.

The Associated Press

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NICOSIA, Cyprus —

A senior Cypriot official says the country is likely to accept raising its corporate tax from 10 to 12.5 percent as part of an international bailout deal.

Nobel Laureate Christopher Pissarides, an advisor to the president, told state broadcaster CyBC Tuesday that the government would accept the move but only if further increases are ruled out for at least a decade, so that companies aren't discouraged from setting up business.

Pissarides also said the prospective bailout creditors - fellow eurozone countries and the International Monetary Fund - say that forcing Cypriot bank bondholders or depositors to share the cost of a bailout would harm Cyprus and the other 16 EU countries that use the euro and won't push that.

Cyprus needs up to (EURO)17 billion to keep its economy afloat.

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