NICOSIA, Aug. 26 (Xinhua) -- Cyprus' finance ministry on Tuesday updated preparations to implement a major tax reform next year, aimed at reducing the burden on the middle class, curbing tax evasion, and creating a fairer tax system.
The consultation period for the overhaul has been extended to Sept. 10 to allow feedback from all stakeholders, the Cyprus Mail reported, citing the ministry. Finance Minister Makis Keravnos is expected to meet soon with parliamentary party leaders to discuss the proposals.
Key draft measures include raising the personal income tax-free threshold from 19,500 to 20,500 euros (22,707 to 23,872 U.S. dollars), adjusting the top 35-percent tax bracket to apply to incomes above 80,000 euros, and increasing the corporate tax rate from 12.5 to 15 percent.
The reform also envisages tougher enforcement against tax violators, including the temporary closure of businesses that repeatedly fail to issue legal receipts, and potentially criminalizing deliberate non-payment of income tax.
According to the ministry, the plan seeks to establish a transparent and stable tax system that supports economic growth, enhances competitiveness, and ensures an equitable distribution of the tax burden.
Cyprus' shadow economy is currently estimated to account for nearly 25 percent of gross domestic product, underscoring the importance of the reform in curbing tax evasion.
Cyprus launched the national consultation of the 2026 tax overhaul after the Cyprus Tax Reform Team presented its proposals to key stakeholders at the Presidential Palace on Feb. 26. The proposals are expected to be voted on by parliament at the end of this year. (1 euro = 1.16 U.S. dollar) ■
