The president convened a meeting to review the legislative progress and ensure the reforms are submitted to parliament in time for full implementation by the set date. The meeting was attended by Finance Minister Makis Keravnos, head of the Tax Department Sotiris Markides, and members of the University of Cyprus’ centre for economic studies, which is overseeing the technocratic planning of the reform. Christodoulides stressed the need to identify any outstanding issues, adding that the cabinet has already taken all necessary decisions to support the drafting of the bills.

Speaking after the meeting, government spokesman Konstantinos Letymbiotis said progress was reviewed and a follow-up meeting is scheduled for June. However, he could not confirm whether the bills would be submitted to parliament before the summer recess. Dates have also been set for meetings with the political parties so that the bills could be sent to the House as soon as possible. Dates have also been set for meetings with political parties, to facilitate the prompt submission of the bills once they are ready.

Letymbiotis added that once finalised, the bills will be presented by the president and the finance minister to all political parties to expedite their approval in the House. He said the final proposal reflects input from all stakeholders involved in the consultation process, including political parties, and has received positive feedback from the public and institutional partners. Letymbiotis emphasised that the new tax system aims to ensure a fairer distribution of the tax burden, directly benefiting citizens and serving the broader interests of society. He also noted that measures are being prepared to ensure a smooth and successful transition once the new tax system is enacted.

Earlier this year, President Christodoulides announced a sweeping tax reform package, which includes raising the income threshold for the top tax bracket. The 35 per cent top income tax rate will now apply to earnings above €80,000 annually, up from the current €60,001. He said the reforms are designed to strengthen the middle class, which he described as “the foundation of every prosperous and democratic society.” As part of the changes, the tax-free allowance will increase by €1,000, with parents receiving an additional €1,000 for each dependent. The plan also includes €1,500 in tax-free income for parents purchasing their first home or renting, and €1,000 for each “green investment” made by a parent. Single parents will receive double the tax-free allowance per category.

On the matter of businesses, he said the government plans to completely abolish deemed dividend distribution payments and “significantly reduce” the withholding tax on the distribution of actual dividends from 17 per cent to five per cent. At the same time, he said corporation tax will increase from 12.5 per cent to 15 per cent, bringing Cyprus into line with European Union requirements.

Source: Cyprus Mail