“Our efforts to secure a change to the timeline for the implementation of green taxes on fuel, water, and waste, scheduled for next May, are ongoing,” said Finance Minister Makis Keravnos.

He made the statement following a session of the Economic Advisory Committee (SOE) at the Ministry of Finance, which he chaired. The meeting focused on discussing the preliminary framework of the Tax Reform, as announced on February 26, 2025. Keravnos stated that the goal is for the new tax reform to be completed and voted into law by the end of 2025, with implementation beginning in 2026.

The meeting included a presentation of the framework by the Economics Research Centre of the University of Cyprus, the project’s contractor. Also present were Energy, Commerce and Industry Minister George Papanastasiou, Labour and Social Insurance Minister Yiannis Panayiotou, the Directorate General for Growth, the employers’ organizations OEB and CCCI, and trade unions PASYDY, SEK, PEO, and DEOK.

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When asked whether the green taxes would indeed be applied next May, Keravnos noted that “there is a commitment for green taxes on fuel, water, and waste, because these have been included in the Recovery and Resilience Plan and are linked to specific milestones.”

“The original milestones were set for November 2022,” he said, “but through persistent efforts, we managed to push the implementation date to May 2025.” He added that “we succeeded in removing the carbon tax for businesses to avoid additional inflationary pressure and also managed, with much effort, to ensure that the green taxes apply for only two years.”

“Our efforts continue,” he stressed, “and I hope we achieve the best possible outcome both in terms of the tax burden on society and in fostering a mentality that allows us to properly understand and address the environmental and climate challenges we face, which are now global concerns.”

Asked whether the possibility of postponing the green taxes was still under consideration, Keravnos responded, “The milestone is set for May, but that does not mean our efforts for a timeline change have ceased.”

Regarding the day’s SOE session, Keravnos said the process is advancing well, with very productive discussions, and that the process is close to a final outcome. “In every meeting with social partners, we hear interesting suggestions, which we evaluate and process,” he added.

According to the Finance Minister, the tax reform aims to ensure a better redistribution of wealth, to support the middle and lower income classes, and to provide the necessary incentives for businesses to continue driving the growth of the Cypriot economy. “This way, we can maintain the positive level at which the economy currently stands, as recognised by all,” he said.

When asked to describe the day’s process, Keravnos said a brief recap was given—“as we’ve presented this many times”—followed by interventions, proposals, and questions for clarification. “I believe everyone left satisfied from a very productive meeting,” he noted.

When asked if any of the proposals had already been adopted by the Ministry of Finance, Keravnos said, “This is not the forum for adopting or rejecting proposals,” explaining that suggestions are recorded and reviewed by experts, including those at the Ministry of Finance.

Responding to whether any comments were made on the presentation, the Minister said everyone was given the opportunity to contribute, and that all participants shared their views and posed questions.

Asked what the next steps would be, Keravnos said the tax reform analysis will continue, and that the final version will pass through the Ministry of Finance. He also noted that the relevant bills are being drafted in parallel and will be submitted to Parliament, where they will also be debated before a final decision is made.

“The goal is to have the tax reform completed and passed by the end of 2025,” he reiterated, “so that when we file our tax declarations in 2026 for the 2025 fiscal year, the new provisions will apply.”

Asked to comment on recent data from the Statistical Service showing that 17.1% of the population was at risk of poverty or social exclusion, Keravnos said: “The government's well-structured and well-targeted social policy is clearly producing results. This is evident from the statistics, which show that our welfare benefits significantly reduce this percentage.”

Asked whether the 17% figure is reasonable, the Minister responded, “It’s not a matter of what’s reasonable.”

“Let’s not forget that this country went through a financial crisis that dismantled everything. We experienced the well-known deposit haircut, we went through COVID,” he added. “So, this government is now dealing with the consequences of these events, and we are working to address them.”

He stated that “these figures clearly show that our social policy is effective, and we will continue it, along with many parallel efforts—including the tax reform—which will further strengthen the middle class, which has been hit hard by all these crises.”