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Cyprus Tax Reform: Balancing Competitiveness With Fiscal Integrity

by THEFUTURE.TEAM

September 10, 2025

Government Initiative Under Scrutiny

The forthcoming tax reform in Cyprus has ignited vigorous debate among key economic stakeholders. As the public consultation period concludes, both the Cyprus Chamber of Commerce and Industry (Keve) and the Institute of Certified Public Accountants of Cyprus (Selk) have articulated their perspectives, underscoring the need for an equilibrium between robust fiscal policies and maintaining the island’s competitive allure for international investors.

Keve’s Support Coupled With Strategic Caution

In a comprehensive six-page memorandum, Keve lauded the government’s commitment to combating tax evasion and enhancing collection mechanisms—a decisive step towards greater market transparency and fairness. However, the chamber also warned that any missteps in altering Cyprus’s long-standing, competitive tax regime could erode one of its foremost advantages in attracting foreign capital.

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Keve emphasized that a balanced approach is imperative to support local industries ranging from manufacturing to services, while concurrently bolstering Cyprus’ status as an attractive investment destination. The memorandum highlighted several reform proposals, including the elimination of deemed dividend distribution for exclusively Cypriot companies and a significant reduction in the special defence contribution from 17% to 5%, measures that had long been championed by the business community. Furthermore, Keve noted that despite a nominal corporate tax rate increase to 15%, the effective tax rate could decline substantially, ensuring a minimum of 15% and a maximum of 19.25%, compared to today’s rates of 23% and 27.4%, respectively.

Selk’s Call For Comprehensive Overhaul

In contrast, Selk adopted a more critical tone in its submission, disputing nearly all aspects of the draft legislation. The institute’s president, Odysseas Christodoulou, underscored the necessity of constant enhancement in both the quality and efficiency of business services to preserve Cyprus’ reputation as a premium business destination. In his correspondence with Finance Minister Makis Keravnos, Christodoulou argued that any effective tax system must rest on the three pillars of competitiveness, fiscal sustainability, and the protection of social welfare.

Looking Ahead: Constructive Dialogue And Future Engagement

As both Keve and Selk present their divergent views, the road ahead appears to be one of constructive dialogue. With Selk’s leadership scheduled for an extensive meeting with the Tax Commissioner on September 10, 2025, further exchanges are anticipated to refine the reform package. This ongoing debate not only reflects the complexities inherent in fiscal reformation but also underscores the delicate balance required between fostering economic growth and maintaining fiscal discipline.

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EU Moderates Emissions While Sustaining Economic Momentum

by THEFUTURE.TEAM

November 15, 2025

The European Union witnessed a modest decline in greenhouse gas emissions in the second quarter of 2025, as reported by Eurostat. Emissions across the EU registered at 772 million tonnes of CO₂-equivalents, marking a 0.4 percent reduction from 775 million tonnes in the same period of 2024. Concurrently, the EU’s gross domestic product rose by 1.3 percent, reinforcing the ongoing decoupling between economic growth and environmental impact.

Sector-By-Sector Performance

Within the broader statistics on emissions by economic activity, the energy sector—specifically electricity, gas, steam, and air conditioning supply—experienced the most significant drop, declining by 2.9 percent. In comparison, the manufacturing sector and transportation and storage both achieved a 0.4 percent reduction. However, household emissions bucked the trend, increasing by 1.0 percent over the same period.

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National Highlights And Notable Exceptions

Among EU member states, 12 reported a reduction in emissions, while 14 saw increases, and Estonia’s figures remained static. Notably, Slovenia, the Netherlands, and Finland recorded the most pronounced declines at 8.6 percent, 5.9 percent, and 4.2 percent respectively. Of the 12 countries reducing emissions, three—Finland, Germany, and Luxembourg—also experienced a contraction in GDP growth.

Dual Achievement: Environmental And Economic Goals

In an encouraging development, nine member states, including Cyprus, managed to lower their emissions while maintaining economic expansion. This dual achievement—reducing environmental impact while fostering economic activity—is a trend that has increasingly influenced EU climate policies. Other nations that successfully balanced these outcomes include Austria, Denmark, France, Italy, the Netherlands, Romania, Slovenia, and Sweden.

Conclusion

As the EU continues to navigate its climate commitments, these quarterly insights underscore a gradual yet significant shift toward balancing emissions reductions with robust economic growth. The evolving landscape highlights the critical need for sustainable strategies that not only mitigate environmental risks but also invigorate economic resilience.