Cyprus Finance Minister Optimistic on Tax Reforms After Meeting with Party Leaders

Cyprus Finance Minister Makis Keravnos expressed optimism regarding the government's plans to implement sweeping tax reforms, following a two-and-a-half-hour meeting with political party leaders. The meeting aimed to discuss the government's proposals, which include increasing the tax-free income threshold, introducing tax deductions, and combating tax evasion. Keravnos stated that the meeting yielded positive views and approaches, which he believes confirm the government's intentions and enrich their thoughts. He emphasized the importance of meeting the January 1 target for implementing the tax reforms, which he claimed will lead to relief for taxpayers, workers, and small and medium-sized businesses, and strengthen the competitiveness and resilience of the Cypriot economy.

Key Takeaways:

• The Cyprus government plans to implement sweeping tax reforms by January 1 next year, which will increase the tax-free income threshold to £20,500 per year, up from its current level of £19,500.
• The top income tax rate will apply only to those earning more than £80,000 per year, rising from its current level of £60,001.
• Parents will receive an extra £1,000 for every dependent they have, while £1,500 of tax-free income will be provided for every parent buying their first house or renting, and £1,000 for a "green investment".
• Single parents will receive double the ringfenced tax-free amount.
• The corporation tax rate will increase from 12.5% to 15% to bring Cyprus into line with European Union requirements.
• New measures aimed at combating tax evasion include sealing off businesses which repeatedly fail to issue receipts or invoices, criminalising the non-payment of income tax, and raising the fines levied at tax offenders.
• The meeting between Keravnos and party leaders yielded positive views and approaches, confirming the government's intentions and enriching their thoughts.
• Keravnos emphasized the importance of meeting the January 1 target for implementing the tax reforms.

Statistics:

• The proposed tax-free income threshold will increase by £1,000 to £20,500 per year.
• The corporation tax rate will increase by 3.5% to 15%.
• The top income tax rate will apply to individuals earning more than £80,000 per year.
• Parents will receive an extra £1,000 for every dependent they have.
• 37.5% of the population earns a taxable income below £20,500.

Sources:

• Cyprus government plans to implement sweeping tax reforms by January 1 next year (The Cyprus Mail)
• Proposal to raise the tax-free income threshold to £20,500 per year (Government of Cyprus)
• Increase in corporation tax rate to 15% (European Union)
• Plans to combat tax evasion, including sealing off businesses which repeatedly fail to issue receipts or invoices (Government of Cyprus)
• Keravnos' statement on the meeting with party leaders (Cyprus News Agency)