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2024: A Pivotal Year For Tourism And Economic Growth In Cyprus

by THEFUTURE.TEAM

December 2, 2024

Deputy Minister for Tourism, Kostas Koumis, has described 2024 as a milestone year for Cyprus’s tourism sector, highlighting record-breaking achievements in visitor arrivals and revenue. His remarks, delivered on Friday, follow the release of impressive figures by the Statistical Service.

Tourism Reaches New Heights

Koumis expressed satisfaction with the sector’s recovery, noting that arrivals and revenue have returned to, and even exceeded pre-pandemic levels. According to the Deputy Ministry, revenue from January to September 2024 rose by 31.1% compared to 2022 and 15.3% compared to 2019. Arrivals for the January–October period increased by 4.6% from 2023, and 26.7% from 2022, and even surpassed 2019’s figures by 0.8%.

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Additionally, Koumis pointed out that per capita expenditure remains steady, reflecting sustained economic benefits from tourism. Looking ahead to 2025, the ministry’s strategy prioritises investment in rural tourism, environmental preservation, and community-driven benefits.

Resilient Sector and Strategic Success

The Deputy Ministry credited the robust performance to effective market-targeting decisions and the resilience of the tourism sector. Koumis emphasised that Cyprus’s approach to diversifying its tourism offerings and focusing on quality experiences has yielded significant results.

Economic Highlights: Fiscal Surplus and Revenue Growth

Cyprus’s broader economic performance in 2024 also stands out. Preliminary data from the Statistical Service reveals a surplus of €1.43 billion (4.2% of GDP) for January–October, up from €664.8 million (2.1% of GDP) during the same period in 2023.

Revenue Growth

Total Revenue: Increased by 6.6%, reaching €11.69 billion.
Taxes on Production and Imports: Grew by 6.2%, with net VAT revenue rising 7.6%.
Income and Wealth Taxes: Surged by 16%, amounting to €2.9 billion.
Revenue from Goods and Services: Jumped by 29.9%, reaching €822.7 million.

While some areas, such as social benefits and employee compensation, saw increases, the overall fiscal picture remains positive, driven by disciplined spending and strong revenue growth.

Looking Forward

With record-breaking tourism figures and a strong fiscal position, Cyprus is well-positioned for sustainable economic growth. Investments in rural development, community benefits, and environmental sustainability ensure that both the tourism sector and the wider economy will continue to thrive in the years ahead.

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Tax Authorities To Step Up Checks On Coastal Businesses In Cyprus

Expanded Regulatory Oversight

Cyprus’ Tax Department plans to carry out onsite inspections of businesses in coastal areas during July and August as part of efforts to strengthen tax compliance. The inspections form part of the government’s broader tax reform programme aimed at reducing tax evasion and improving tax collection.

Targeting High-Impact Sectors

Authorities will focus primarily on businesses that experience increased customer activity during the summer tourism season. Inspections will examine compliance with receipt issuance requirements and review outstanding tax liabilities. Businesses found in breach of the regulations may face enforcement measures, including the temporary suspension of operations until compliance requirements are met.

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Strict New Legal Framework

Legislation that entered into force on January 1, 2026, allows authorities to temporarily close businesses, legal entities and individuals with tax debts exceeding €20,000, as well as businesses that fail to issue receipts. Initial enforcement measures are expected to follow practices similar to those used in Greece as Cyprus expands its tax compliance efforts.

Operational Tactics And Enforcement

According to local reports, tax officials will conduct checks by comparing receipts issued by businesses with those held by customers. Inspectors will verify transaction details using digital tools and review whether receipts have been issued correctly. Businesses that fail to comply will receive three warnings and a total compliance period of 25 days before closure measures can be applied.

Focus On Large Debtors

Initial enforcement efforts will target approximately 500 businesses with tax debts exceeding €1 million. The list includes companies operating in sectors such as betting, retail, yacht sales and vehicle dealerships. Although the legislation applies to businesses with debts above €20,000, authorities have indicated that larger debtors will be prioritised during the first phase of implementation.

Future Implications And Extended Enforcement

Additional enforcement measures are expected to be introduced in 2027. Planned provisions may allow authorities to close businesses that fail to submit tax, VAT and other statutory returns. Once compliance requirements have been satisfied and verified by the Tax Commissioner, affected businesses will be permitted to resume operations.