Tax Reform Delivers Immediate Benefits
The recently implemented Tax Reform is already making a significant impact on the everyday lives of citizens, families, and businesses, as the reduction in the tax burden and the increase in net disposable income become evident. Approximately 200,000 taxpayers benefited from higher net earnings with the January wage disbursement, and projections indicate that by 2026, 30,000 individuals will be fully exempt from income tax. These figures underscore the reform’s success in returning more income to the public, supporting the middle class, and reinforcing social cohesion through a modern and equitable tax framework.
Enhanced Support For Families And Employees
According to Mr. Sotiris Markidis, a senior official in the Tax Department, a family with four children and an annual income of €130,000 can expect an increase in available income of roughly €7,000 per year. Similarly, a single-parent household with three children earning €70,000 annually is projected to gain more than €4,000. A pivotal aspect of the reform is the rise of the tax-free income threshold to €22,000, which means an even larger share of employees will be fully exempt from income tax. This feature sets the policy apart within the European Union. Cyprus, which already had one of the highest tax-free thresholds in Europe, has now raised it even further.
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A Boost For Small And Family Businesses
The reform also offers sizeable advantages for the real economy. Measures such as the elimination of the deemed dividend distribution and a significant reduction in the Extraordinary Defense Contribution are anticipated to benefit over 30,000 small family businesses by enhancing liquidity and competitiveness. In addition, new tax incentives focused on innovation, green investments, and modern business practices are molding a stable and attractive fiscal environment that promotes sustainable growth.
A Foundation For A Fairer And More Competitive Economy
Implemented after two decades of governance, the Tax Reform establishes solid foundations for a more just society and a competitive economy, with policies that yield immediate and substantial benefits for everyday citizens.
