The Government's Ministerial Council approved a draft law on Wednesday, which introduces tax deductions for businesses undertaking energy upgrades. Additionally, the deadline for tax payment has been extended until October 2nd, and the obligation to file tax returns for individuals with a taxable income below €19,500 has been suspended for another year.

In his statements, the Minister of Finance, Makis Keravnos, stated that the Ministerial Council has approved a proposal from the Ministry of Finance regarding a draft law aimed at diversifying income taxation concerning businesses. Specifically, the proposal introduces tax deductions for specific capital expenses that lead to energy upgrades and energy savings by businesses. This measure aligns with the government's objective of fostering a green economy while reducing operational costs for businesses.

To improve the energy efficiency of buildings, a higher capital deduction of 7% is now granted, compared to the previous rate of 3%. Moreover, for investments in machinery, equipment, and technical systems related to renewable energy sources, as well as energy efficiency improvement systems for businesses, an increased capital deduction of 20% is now provided.

Furthermore, an increased capital deduction of 25% is available for new electric commercial vehicles, including taxis and buses. Finally, the draft law clarifies that expenses incurred for energy upgrade studies or energy-saving certification are not considered taxable income.

Moreover, Mr. Keravnos further emphasized that this is an important decision that encourages and supports Cyprus’ businesses in modernizing their energy utilization, thus contributing to the green economy.

Another decision taken by the Ministerial Council involves an extension of the deadline for submitting tax returns for the year 2022. The deadline for tax payment has been extended until October 2nd, 2023.

The need for this extension arose to allow time for the approval of relevant legislation, which is currently being reviewed by the House of Representatives. This legislation concerns the exemption of remuneration from initial employment in the Republic, applicable for the tax year 2022, the Finance Minister explained. Once this matter is finalized in the next few weeks, the modified application forms will be available, enabling taxpayers to submit their tax returns.

The Minister also mentioned another decision to suspend, for an additional year, the obligation to file tax returns for individuals with a taxable income below €19,500. This measure aims to prevent an overwhelming volume of tax returns during the implementation of the new tax system, which is currently being tested, allowing for the prompt acceptance and processing of these applications.

In addition, the Ministerial Council gave the green light to an ambitious action plan titled "Modern Professional Development for Green and Digital Transition." This move comes as part of the broader European Year of Skills initiative.

Following the Ministerial session, Minister of Labour, Yiannis Panagiotou, specified the government's objectives, stating, "our primary goal is to advance green and digital skills while simultaneously enhancing the quality and security of the working environment." The action plan, according to Mr. Panagiotou, centers around the promotion of a modern professional culture, specialization, certification, and socially targeted vocational training.

Anticipating significant participation, the Minister further added that "over the next year, tens of thousands of individuals will be engaged in the learning activities encompassed within the action plan. Ultimately, this number is expected to reach an impressive 100,000 participants. Leveraging the existing resources from the Recovery and Resilience Plan, which amount to €15 million, and an additional €3 million in supplementary funds, we aim to fuel this transformative initiative."

Echoing the sentiment, Minister of Education, Athena Michaelidou, highlighted the comprehensive nature of the plan. She stated that "the action plan encompasses activities and policies addressing the needs of the youth and the educational system within our country, as well as aligning with European priorities. As part of this plan, strategic actions within the educational system will propel our transition from an outdated, skills-deficient system to a framework that empowers students and young people to showcase their talents, abilities, and skills through a range of carefully curated initiatives."

Underscoring the importance of digital proficiency, Deputy Minister of Research, Innovation, and Digital Policy, Philippos Hatzizacharias, emphasized the plan's focus on digital skills development. "Our objective is to foster and continually enhance digital skills across all segments of the population, including vulnerable groups and remote geographical areas," he explained. Mr. Hatzizacharias also shed light on the establishment of a digital citizens' academy, an innovative online platform featuring a self-assessment tool. Such a tool will enable citizens to evaluate their skill levels across four proficiency tiers: basic skills, elementary level, intermediate level, and advanced level.

To showcase the importance and significance of the action plan, an official presentation is scheduled to take place during a press conference at the Presidential Palace on June 2, 2023, while the President of the Republic will preside over the event.