The Economic Research Center of the University of Cyprus, in collaboration with the Ministry of Finance's General Director Mr. Giorgos Panteli, is preparing an impact report on "green" taxation and compensatory measures. This report, expected to be finalized by the end of the month, will pave the way for the introduction of green taxes on fuels and water in early 2024.

According to Brief's sources, the study aims to complete an economic impact assessment and econometric estimates of the taxation across various income groups and population segments with distinct characteristics. Recommendations will be made for corresponding compensatory measures to mitigate the impact of these new taxes.

The Center, tasked with drafting the new tax reform, will also include economic models, tools, and econometric models developed in collaboration with other European Union centers. Furthermore, a macroeconomic analysis focusing on Cyprus and other countries will be proposed, examining trends in tax revenues, income inequalities, tax burdens, and tax reliefs.

In the new year, a thorough analysis and documentation of the existing tax framework will be conducted in cooperation with the Tax Department. This process aims to identify potential weaknesses, gaps, or administrative burdens in laws, circulars, and regulations, followed by suggestions to simplify the tax system.

The proposed tax reform will cover corporate taxation, income tax, Capital Gains Tax, and other forms of taxation, including stamp duties and simplification of the tax system.

The reform will consider the green and digital transition outlined in the Cyprus Recovery and Resilience Plan, EU and international tax trends, and aspects of VAT Law, Social Insurance Law, and the General Health System Law.

Experts in public finance, competitiveness, environmental economics, labor economics, tax experts, and legal advisors from the Center's network in Cyprus and abroad are involved in this project. If necessary, foreign experts with extensive knowledge in tax matters will also be consulted.

Throughout the process, the Project's Advisory Committee is consulting with all relevant economic and social entities, including employers' and trade unions' organizations.