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Tax Reform As A Modernization Catalyst: PASYDY And KEVE Applaud Progressive Change

by THEFUTURE.TEAM

Stakeholders Hail A New Era In Cyprus Tax Policy

The recent passage of the tax reform bills has been met with optimism by key industry organizations. Both PASYDY and KEVE have welcomed the legislation, praising it as a significant step toward modernizing Cyprus’ tax framework—with PASYDY emphasizing fairness and economic stability, and KEVE focusing on competitiveness and investment confidence.

Pasydy Celebrates A Modern And Equitable System

PASYDY expressed satisfaction with the executive initiative to enact an all‐encompassing tax reform, highlighting the importance of a modern and equitable tax system as a cornerstone for economic stability, social justice, and sustainable growth. The association underscored that the new legislation will contribute substantially to curbing tax evasion while strengthening the state’s revenue collection mechanisms.

Notably, PASYDY recalls its March 2022 submission to the Minister of Finance, which recommended adjustments to personal income tax brackets—citing deflationary effects from the previous revision nearly two decades ago. Several of its proposals were incorporated into the final bill, including the expansion of tax brackets and income criteria for tax deductions, particularly benefiting families with children. These measures are expected to offer annual savings of between €500 and €2,000, providing significant relief to the middle class.

Keve: A Milestone For Transformation And Competitiveness

KEVE, representing the broader business community, has characterized the reform as a transformational milestone. The chamber’s leadership believes the overhaul aligns the tax system with the demands of a modern economy, thus enhancing Cyprus’ international competitiveness. KEVE sees the reform as a historic opportunity to fortify the country’s economic stability, transparency, and appeal as a destination for business and investment.

KEVE’s response highlights several key enhancements, including the elimination of the imputed dividend distribution and a reduction in the Extraordinary Defense Contribution on dividends to 5%. In its strategic dialogue with policymakers, the chamber placed a premium on legal certainty and a stable business environment—ensuring that revenue collection is balanced with judicial oversight, and that administrative provisions remain clear to foster both international outreach and investment attraction.

Moreover, the reform is lauded for its substantial societal impact. KEVE pointed to the increased tax-free threshold and targeted support measures for families as instrumental in bolstering disposable income and addressing declining birth rates. The chamber has committed to closely monitoring the implementation of the reform as it continues to serve as a key institutional partner in advancing economic progress and prosperity across Cyprus.

Cyprus Expected Working Life Reaches 39.5 Years, Above EU Average

by THEFUTURE.TEAM

People in Cyprus are expected to spend 39.5 years in the workforce, around two years longer than the European Union average of 37.5 years, according to the latest Eurostat data for 2025.

The figure places Cyprus among the EU countries with the longest expected working lives.

Cyprus Ranks Above EU Average

Only a handful of member states recorded higher figures than Cyprus. The Netherlands topped the ranking at 44 years, followed by Sweden at 43.4 years, Denmark at 42.6 years, and Estonia at 41.5 years.

At the other end of the ranking were Romania with 32.7 years, Italy with 33.0 years, Bulgaria with 34.6 years and Greece with 35.3 years.

Gender Gap Remains Wider Than EU Average

Men in Cyprus are expected to remain in work for 42.1 years, compared with 36.7 years for women. The gap of 5.4 years exceeds the EU average gender gap of 4.1 years.

Across the bloc, Lithuania, Latvia and Estonia were the only countries where women were expected to spend longer in employment than men. Finland recorded the smallest positive gender gap at 0.7 years.

Italy posted the widest gap at 8.9 years, followed by Romania at 6.9 years, Greece at 6.7 years and Malta at 6.3 years.

Working Lives Continue To Lengthen

Between 2016 and 2025, expected working life in Cyprus increased by 3.5 years, placing the country among the strongest performers in the EU over the period. Men’s expected working life rose by 3.3 years, while women’s increased by 3.6 years.

Across the EU, every member state recorded an increase. Malta posted the largest gain at 4.9 years, followed by Hungary and Ireland at 4.2 years each, and the Netherlands at 4.1 years.

Malta’s increase was driven largely by women, whose expected working life rose by 7.8 years, the biggest increase recorded across the bloc.

By comparison, Romania, Spain, Italy, Germany and Austria recorded gains of two years or less over the same period.

Women’s Working Lives Increase Faster Across Europe

Women’s expected working life increased faster than men’s in most EU countries. Denmark, Romania, Sweden and Greece were the main exceptions.

In Cyprus, gains for men and women were broadly similar, alongside Bulgaria, Belgium and Slovenia.

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