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EDek Proposes Bold Tax Reforms for Corporate and Individual Relief

Strategic Overhaul of Cyprus Tax Policy

The organization EDek has formally presented its comprehensive proposals for overhauling Cyprus’s tax legislation, outlining a series of measures aimed at easing the burden on companies and individual taxpayers. In a detailed letter addressed to both the President of the Republic and the Parliament, EDek emphasized that unless their proposals are integrated into forthcoming bills, they will move to submit amendments.

Reshaping Corporate Tax Relief

Central to EDek’s strategy is the adjustment of tax rates for corporate entities. The proposals include reducing the corporate tax rate and the special defense levy for small businesses, while reinstating property tax on real estate assets valued above €3 million. Additionally, EDek advocates for enhanced tax credits for individuals and the doubling of tax deductions available to lower-income groups. Despite the increase in the corporate tax rate from 12.5% to 15%, a significant reduction in the defense levy on corporate dividends—from 17% to 5%—serves to balance the overall tax landscape, disproportionately benefiting larger companies.

Encouraging Differential Relief for Small Enterprises

EDek calls for the introduction of a tiered taxation system that provides more substantial relief for small and micro-enterprises. They propose adjusting the defense levy and reducing the corporate tax rate to 10% for these businesses, suggesting that any shortfall in public revenue could be compensated by an increase in the levy for larger corporations. This approach is designed to create a more equitable fiscal environment where the tax benefits are aligned with company size and capacity.

Enhancing Incentives for Property Owners

The reform agenda also recognizes the financial pressures facing property owners. EDek recommends maintaining the current 3% defense levy on rental incomes but proposes converting this amount into tax credits or deductions for individuals in the lower and middle income brackets. This measure, they argue, would alleviate the tax burden on those most affected by rising costs, given that property owners predominantly fall within these income groups.

Streamlining Tax Credits for Individuals

For individual taxpayers, EDek’s proposals focus on simplifying and expanding tax credits. They recommend doubling the deductions available for families earning up to €45,000 and extending eligibility thresholds from €80,000 to €100,000 for incomes between €45,000 and €100,000. Furthermore, EDek advocates eliminating bureaucratic hurdles—such as the mandatory certification for the repayment of housing loans—arguing that such requirements impede both the speed and efficiency of tax filing and review processes.

Revisiting Property Taxation

In addition to reforms affecting companies and individuals, EDek pushes for the reintroduction of the property tax on assets exceeding €3 million, a measure supported by research from the University of Cyprus. This tax would exclude properties held as business inventories or those generating operational income, ensuring that the levy targets high-value assets. EDek also supports the proposal by other political factions to eliminate the stamp duty, while cautioning that any revenue shortfall must be offset by adjustments in other tax areas.

Conclusion

EDek’s proposals signal a robust and balanced approach to tax reform in Cyprus, seeking to promote fiscal fairness by tailoring relief measures to both corporate scale and individual income levels. As these proposals are debated in the corridors of power, their ultimate impact on the nation’s economic structure will be closely monitored by both policymakers and the business community.

Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.

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