Cyprus has deployed approximately €1 billion through five support packages since 2023 to ease the impact of rising prices, Finance Minister Makis Keravnos said. The measures include tax relief, expanded child-benefit eligibility and support aimed at protecting household disposable income.
In a statement published on the government’s social media channels, Keravnos said the country’s economic resilience and strong fiscal position had enabled the government to return part of the benefits of economic growth to households and small businesses.
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Tax Reform Boosts Household Income
Tax reform introduced in January has increased disposable income for approximately 200,000 people, according to the minister. More than 50,000 people are now exempt from income tax.
Additional relief includes deductions for rent or mortgage interest on a primary residence, as well as investments in energy-efficient and other green home improvements.
Higher Tax Deductions And Child Benefits
Families are eligible for additional tax deductions based on the number of children:
- €1,000 for the first child
- €1,250 for the second child
- €1,500 for the third and each subsequent child
Income thresholds for child benefit have also increased to €90,000 for families with three children and €100,000 for those with four. Households with five or more children are no longer subject to income criteria for the benefit, Keravnos said.
Imported Inflation Continues To Pressure Households
Keravnos attributed much of the cost-of-living pressure to imported inflation, partly driven by an energy crisis linked to armed conflicts. He said government policy focuses on protecting the disposable income of workers, vulnerable groups and households.
The minister has also highlighted the resilience of Cyprus’ economy while calling for greater flexibility and less bureaucracy across the European Union.
Fiscal Surpluses Support Government Measures
The government’s ability to assist households and small businesses is underpinned by economic resilience and disciplined fiscal management, Keravnos said. Budget surpluses and declining public debt allow the state to meet its borrowing obligations while directing part of the gains from economic growth back to society.
“We support society because our economy allows us to,” the minister said, adding that protecting the most vulnerable remains a priority.
Further details on the support measures are available at se-afora.gov.cy.
