The tax reform bills designed to modernize Cyprus's tax framework are expected to be submitted to the Council of Ministers for approval with only minor changes from the original recommendations provided by experts from the Economics Research Centre (CypERC) of the University of Cyprus and approved by the Ministry of Finance.

According to Brief’s sources, the bills are currently undergoing legal and technical review before being tabled for Cabinet approval and, subsequently, for a parliamentary vote.

Finance Minister Makis Keravnos, who has been closely involved in the reform process, appears determined to push the bills through Parliament in their current form or with minimal alterations. The goal is to preserve the philosophy, structure, and intent of the proposed legislation.

The proposed laws incorporate analyses, assessments, and feedback gathered throughout all stages of the reform’s development. This includes contributions from the private sector, professional bodies, industry stakeholders, and advisory councils.

Brief has learned that the Ministry of Finance has already finalized its decisions on key elements of the reform, such as tax rates and other structural parameters.

As part of the reform’s preparation, a public consultation process was held. It featured 40 bilateral meetings with representatives from the private sector, employers’ associations, trade unions, professional organizations, and political parties.

In addition, the Finance Ministry solicited written proposals from both organizations and individual citizens, aiming to create a fair and comprehensive tax framework.

Following the presentation of the preliminary reform framework by the CypERC, the plan entered a three-week public consultation period. It was later discussed at the governmental level before the drafting of the final bills.

It’s worth noting that the Economics Research Centre conducted a concise quantitative and qualitative assessment based on the proposed tax parameters. This included an analysis of trends in tax revenue, income inequality, tax burdens and reliefs, both in Cyprus and internationally. The analysis aimed to contextualize the reforms within broader tax policy developments, particularly within the EU.

The tax reform is extensive, covering corporate taxation, income tax, capital gains tax, stamp duties, and other forms of taxation. It also aims to simplify the overall tax system.

A key focus of the reform is to support Cyprus's green and digital transitions, as well as to meet commitments outlined in the Recovery and Resilience Plan and align with broader EU and global tax trends.