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Transformative Tax Reform Delivers Immediate Relief For Citizens And Businesses

Introduction

The recent tax reform has been implemented with an unwavering focus on fairness and efficiency, immediately benefiting citizens, families, and businesses. With a sharp reduction in tax burdens and an increase in net disposable income, this policy shift reflects a modern, competitive, and human-centered approach to taxation.

Modernizing the Tax Framework

The government has introduced a streamlined and proportional tax system designed to match the evolving needs of society and the economy. Central to the reform is the significant increase in the tax-free income threshold to €22,000 for all, irrespective of family status. The new tax brackets now levy rates of 20% on incomes between €22,001 and €32,000, 25% between €32,001 and €42,000, 30% for incomes between €42,001 and €72,000, and 35% on incomes above €72,000, thereby easing the fiscal pressure on the middle class.

Real-World Impact: Detailed Household Examples

Dual-Income Household With Mortgage and Photovoltaic Installations

A typical household with two working parents, two children (or students up to 24 years), a recent mortgage of €200,000, and an investment in solar panels, sees considerable savings through a combination of tax deductions. The recalculated figures illustrate how net tax liabilities dramatically drop from €4,400 to €1,000 – a benefit that translates to an increase in disposable income of €3,400.

Single-Parent Household With Two Children, Rental Expenses, and an Electric Vehicle

In the most favorable scenario for single-parent households, a single earner with two children, paying an annual rent of €7,000 and having acquired an electric vehicle, experiences a significant tax advantage. In this setup, tax deductions boost the net benefit by reducing the overall tax liability from €3,450 to €1,100, netting a gain of €2,350.

Individual Professional With Rental Expenses and an Electric Vehicle

The reform also supports single individuals. A single professional with a taxable income of €28,000, incurring rental expenses of up to €2,000 and having recently purchased an electric vehicle, benefits from deductions that lower the tax from €1,700 to €600 – effectively raising disposable income by €1,100.

Large Family With Five Children and Energy Upgrades

For larger families, particularly those with five children or students aged up to 24, the cascade of tax deductions is even more pronounced. In a scenario involving a dual-income household with a combined income of €125,000, a mortgage of €250,000, and recent energy upgrades, the array of deductions reduces the total tax liability from €23,770 to €17,777, thereby increasing household disposable income by €5,993.

Empowering Citizens Through Digital Tools

The essence of this tax reform—crafted after two decades of deliberation—is to return tangible benefits directly to the citizen, foster social cohesion, and lay the groundwork for sustainable, competitive economic growth. Citizens can immediately calculate their personalized benefit using the new digital tool available at Government Tax Reform.

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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