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Taxing Banks: Divergent Proposals to Address Extraordinary Profits

by THEFUTURE.TEAM

January 30, 2026

Overview Of The Debate

The ongoing discourse in Parliament has taken a new turn as political factions spearhead proposals to levy additional taxes on banks, aiming to capture the extraordinary profits these institutions have generated in recent years. Two parties have taken differing legislative approaches, each proposing a tailored fiscal measure set to be scrutinized before Parliament’s dissolution in April, amid expectations of early May elections.

AKEL’s Proposal: An Extraordinary Solidarity Levy

AKEL advocates for an extraordinary solidarity levy targeting banks for the fiscal years 2025-2026. The measure seeks to impose a 40% charge on the increment of net interest income compared to the benchmark year of 2022—the year that marked the rise in interest rates. In effect, approximately 20% of total banking profits would be subject to additional taxation, with generated revenues earmarked for the State General Fund. According to the proposal, these funds would later support targeted initiatives such as subsidizing new and existing mortgage loans and providing relief to vulnerable borrowers. More details can be found in AKEL’s outline of the solidarity levy.

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ELA’s Proposal: Revising The Special Bank Tax

In contrast, ELA (ΕΛΑΜ) has tabled a legislative amendment aimed at revising the framework of the current special bank tax. The proposal recommends raising the tax on total deposits from 0.00375% to 0.07%. ELA defends this adjustment as both equitable and fiscally advantageous, arguing that it will foster a fairer redistribution of the financial sector’s returns, while concurrently reinforcing public finances.

Political Dynamics And Anticipated Challenges

Despite the robust fiscal rationale behind these proposals, both measures face significant headwinds. Parties such as DISY and DIKO, consistent with their previous coalitions on similar issues, are likely to align against these proposals. Moreover, the Ministry of Finance, the Central Bank, and the Bankers’ Association have already expressed reservations, indicating complex negotiations ahead as these proposals await review by the Parliamentary Committee on Economic Affairs prior to a full Assembly vote.

Conclusion

The contrasting initiatives from AKEL and ELA underscore a broader debate on how best to harness bank profits for public benefit. As discussions progress, the outcome will not only shape the national fiscal landscape but may also set a precedent for future fiscal policies in the financial sector.

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EU Services Production Grows As Information And Communication Lead

by THEFUTURE.TEAM

November 10, 2026

Services production continued to expand across the European Union in August 2026, with information and communication recording the strongest annual growth. However, performance varied significantly between industries and member states, while Cyprus reported a mixed picture, with business services expanding and hospitality-related activities declining.

Information And Communication Leads Sector Growth

Compared with August 2025, services production increased by 5.9% in the euro area and 5.8% across the EU in information and communication. Transportation and storage also recorded growth, rising by 2.1% and 1.9%, respectively.

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Real estate activities increased by 1.6% in the euro area and 1.1% in the EU. Professional, scientific and technical activities grew by 1% in both areas, while administrative and support services advanced by 1.1% and 1.3%.

Accommodation and food services was the only major sector to record an annual decline, falling by 0.1% in both the euro area and the EU.

The monthly figures were more mixed. Information and communication remained the strongest performer, increasing by 1.2% in the euro area and 1% across the EU. Real estate activities rose by 0.4% and 0.9%, respectively, while transportation and storage edged up 0.1% in the euro area but declined by 0.2% in the EU.

Administrative and support services recorded modest gains of 0.2% in the euro area and 0.1% in the EU. Accommodation and food services fell by 0.3% and 0.4%, while professional, scientific and technical activities declined by 0.8% and 0.9%, respectively.

Slovakia And Greece Record Strongest Annual Growth

Romania recorded the largest monthly increase in services production, at 5.2%, followed by Malta at 1.8% and Portugal at 1.7%. Luxembourg experienced the steepest decline, with output falling by 5.1%, followed by Bulgaria at 2.3% and Denmark at 1.9%.

On an annual basis, Slovakia led with growth of 10%, followed by Greece at 9.3% and Malta at 7.5%. Hungary recorded the weakest performance, with services production declining by 5.6%. Denmark fell by 5.3%, while Italy recorded a smaller decrease of 0.3%.

Cyprus Sees Growth In Business Services But Weakness In Hospitality

Cyprus’ latest figures show a similar divide between expanding business services and weaker hospitality-related activities. According to the Statistical Service of Cyprus (Cystat), professional, scientific and technical activities recorded the strongest annual growth among the covered sectors in the second quarter of 2026, increasing by 3.4%.

Transportation and storage and information and communication both grew by 2.1%, while real estate activities rose by 1.6%. In contrast, accommodation and food services declined by 3.1% year on year, and administrative and support services fell by 2.2%.

First-half results were more favourable for several sectors. Between January and June, professional, scientific and technical activities grew by 3.5%, transportation and storage by 2.8%, real estate by 2.1% and information and communication by 1.3%.

Nevertheless, administrative and support services contracted by 1% over the six-month period, while accommodation and food services declined by 0.7%.

How Cyprus’ Figures Differ From Eurostat’s Data

The Eurostat and Cystat figures measure different aspects of economic activity and are not directly comparable. Eurostat’s services production index tracks changes in the volume of output, whereas Cystat’s Turnover Value Index for Services and Transport measures the value of sales at current prices.

The reporting periods also differ: Eurostat’s figures cover August, while the cited Cypriot data relate to the second quarter and first half of 2026.

Cystat transmits services production data to Eurostat but does not yet publish a separate national production index. Turnover figures therefore remain the main publicly available national indicator for the sector.

Taken together, the data point to continued growth in several of Cyprus’ business-oriented services, alongside persistent pressure on accommodation, food and administrative support activities.