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Cyprus Tax Revenue Drives State Income To €4.44 Billion

by THEFUTURE.TEAM

July 24, 2026

Cyprus executed 25% of its €1.62 billion development budget during the first six months of 2026, matching the pace recorded a year earlier and remaining above the 10-year average, according to the state treasury. By the end of June, €412.39 million had been spent under the development budget, maintaining the same implementation rate as in the first half of 2025.

Revenue Growth Driven By Higher Tax Receipts

State revenue reached €4.44 billion in the first half of the year, equal to 41% of the annual target, up from €4.21 billion during the same period of 2025. The increase was largely driven by tax collections. Indirect tax revenue rose by €170 million, while direct taxes increased by €90 million.

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Value-added tax receipts climbed to €1.68 billion from €1.48 billion a year earlier, helping lift indirect tax revenue by 8% to €2.29 billion. Direct taxes rose 6% to €1.58 billion, supported by an additional €100 million in corporate and personal income tax receipts.

Spending Increased Across Social Benefits And Transfers

Government expenditure totalled €4.63 billion, representing 40% of the annual budget, compared with €4.41 billion in the first half of 2025.

Higher spending reflected a €110 million increase in transfers and grants, an €80 million rise in operating and other expenses, and €50 million in additional social benefits.

Payroll, pensions and gratuities remained broadly unchanged at €1.63 billion, while social benefit spending increased 5% to €960 million. Transfers and grants climbed 12% to €960 million, driven primarily by higher contributions to the EU budget and the Social Insurance Fund.

Operating expenditure also increased to €430 million from €350 million, largely due to higher defence, policing and general operating costs. Financing costs moved in the opposite direction, declining to €390 million from €410 million.

Debt Activity Accelerated

Government borrowing activity increased significantly during the first half of the year. Loan drawdowns and repayments received reached €1.25 billion, compared with just €30 million a year earlier, while debt repayments and loan issuance rose to €2.09 billion from €110 million.

Development Spending Focused On Infrastructure

Capital investment under the development budget reached €140.8 million. Road infrastructure accounted for the largest allocation at €29.4 million, followed by construction projects (€25 million), government buildings (€17.5 million), equipment (€14.4 million), school buildings (€10.7 million), and water and sewage infrastructure (€5.3 million).

EU Programmes And Universities Received Continued Support

Co-financed projects and targeted programmes received €105.7 million, including funding for childcare support, industry and technology initiatives, home affairs programmes, energy-efficiency schemes, electromobility and sustainable urban mobility.

Universities and research institutions received €115.1 million in grants. The University of Cyprus received €64.2 million, followed by the Cyprus University of Technology with €34.4 million, the Open University of Cyprus with €5.5 million, the Cyprus Institute with €3.9 million and the Cyprus Institute of Neurology and Genetics with €2.6 million.

Full-Year Budget Targets Moderate Growth

The 2026 budget projects revenue of €10.78 billion, up 5% from 2025, while expenditure is expected to increase 3% to €11.44 billion. Higher revenue is expected to come mainly from direct taxes and grants, while additional spending will largely reflect increased operating costs.

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Retail’s AI Push Faces A Cybersecurity And Regulatory Reality Check

by THEFUTURE.TEAM

October 19, 2026

Artificial intelligence is becoming a strategic priority for retailers, with 80% of retail leaders planning to increase investment in the technology, according to EY’s latest CEO Outlook Survey. However, growing concerns over cybersecurity, customer privacy and regulation could complicate adoption across an industry already facing inflation, geopolitical uncertainty and changing consumer expectations.

Confidence In AI Comes With Risks

The survey found that 80% of retail leaders are confident in their ability to expand the responsible use of AI and customer data. Retailers are increasingly applying the technology to demand forecasting, inventory management, customer service and personalised marketing, seeking to improve efficiency and respond more quickly to market changes.

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Yet adoption brings new vulnerabilities. EY found that 24% of retail leaders identified cybersecurity and data privacy as a leading business risk for the year ahead. Retailers manage sensitive customer information, payment systems and complex supply chains, making effective security and governance essential as AI becomes more deeply embedded in their operations.

The World Economic Forum’s Global Cybersecurity Outlook 2026 highlights the wider challenge: 87% of organisations reported rising cyber risks linked to AI vulnerabilities, while 94% expected malicious AI to have a significant impact on cybersecurity in 2026.

Regulation Will Shape AI Adoption

Regulatory frameworks are also influencing how quickly retailers can expand their use of AI. The European Union’s AI Act, China’s state-led governance model and measures introduced by individual US states are shaping the rules around the technology.

For retailers, compliance is becoming a strategic consideration, particularly for customer-facing applications that use personal data to personalise offers, automate interactions or analyse consumer behaviour. Regulatory missteps could carry significant costs in a sector where customer trust is critical.

EY Outlines Four Possible Futures

EY recommends that retailers plan for multiple outcomes rather than assume the current investment boom will continue uninterrupted. Its analysis draws on a four-scenario framework developed by Jim Dator of the University of Hawaii.

One scenario envisages constrained AI adoption as economic pressures, regulation, cyberattacks, legacy systems and poor data quality limit progress. Retailers in this environment may prioritise lower-risk back-office applications, such as finance, procurement, inventory and logistics, while customer-facing tools face resistance.

A second scenario anticipates continued growth, with sustained investment and widespread adoption. A third envisages deeper economic and social transformation as technology reshapes business operations. The fourth considers systemic breakdown, in which a small number of technology platforms control access to AI models and charge premium prices, potentially making advanced capabilities less accessible even to large retailers.

Governance Will Determine Competitive Advantage

EY’s findings suggest that investment alone will not determine which retailers benefit most from AI. Companies will also need robust cybersecurity, effective governance and strategies that can adapt to different economic, technological and regulatory conditions.

For a sector operating on tight margins, the challenge is to turn AI investment into lasting business value while managing the risks that come with greater dependence on the technology.