President of the Republic Nikos Christodoulides said on Wednesday that the new tax system will be more efficient, more fair, and more adapted to modern challenges and needs.

Addressing the presentation of the project “Cyprus Tax Reform: Recommendations for a Modern Tax System”, at the Presidential Palace, he said that today after 23 years, we are presenting, in collaboration with academics, technocrats, experts, a comprehensive framework of recommendations for the substantial tax reform of our country.

A significant reform, he continued, of particular political, economic and social importance, in a Cyprus that is changing, which ensures a fairer distribution of income, which limits social inequalities and which strengthens economic and social cohesion in our country.

“A Cyprus that is changing with a tax system that is more efficient, fairer, more adapted to modern challenges and needs”, he stressed.

The Cypriot economy, President Christodoulides pointed out, is recording one of the highest growth rates in the Eurozone. “We have full employment conditions, a strong fiscal surplus and a steady reduction in public debt,” he pointed out.

This tax reform, he added, is focused on the people.

Moreover, President Christodoulides said that the goal is to strengthen the real economy and the competitiveness of Cypriot enterprises that create well-paid jobs and above all to strengthen the disposable income of citizens at a time with many challenges.

Middle Class is, within the framework of social liberalism, at the center of our political approach, President Christodoulides noted, adding that it is the foundation of every prosperous and democratic society.

Within this framework, he said, we propose a substantial increase in tax-free income for individuals and a series of significant tax deductions that take into account the needs of households and the composition of the family, exceeding what we had set as a campaign target, in relation to tax-free income.

“At the same time, our Youth is essentially supported, while, tax relief incentives are given for both parents, in the case of families, further encouraging the employment of women and responding to structural, long-term distortions, such as demographic and housing,” he said.

In relation to Cypriot businesses, President Christodoulides said that the government would completely abolish the deemed distribution of dividends and significantly reduce the withholding of tax on the distribution of actual dividends to 5%.

“The fair burden, the more effective tax treatment of profits, with a parallel increase in corporate tax to 15%, demonstrate our clear will to strengthen the country’s productive fabric and to enhance our international image and credibility, which is a top priority for our governance,” he went on to say.

“The goal remains to invest in innovation, quality and reliability, so that Cyprus becomes a pole of attraction for quality investments and of course an agent of security and stability in the wider Eastern Mediterranean region,” he stressed.

The President also said that ensuring a decent standard of living for all, supporting the family and the new generation, addressing housing and low birth rates, encouraging women to join the labour market, promoting the green and digital transition and of course tackling tax evasion, are key objectives of the Tax Reform.

Meanwhile, speaking at the presentation, Finance Minister Makis Keravnos said that today’s event is the third in a series of presentations regarding the upcoming tax reform, which is “an emblematic reform of our Government”.

“It is one of the announcements of President Christodoulides’ campaign programme, which began to be implemented in a planned manner with steady steps and consistency,” he added.

Keravnos said that in the context of social dialogue and exchange of views, more than 50 bilateral meetings have been held with private sector entities, associations, federations, employer organisations, unions, organisations, professional bodies and political parties.

He also said that written positions and opinions have been requested, which have been recorded and duly evaluated, so that the issues of concern to the entities are weighed in the planning of the holistic tax reform.

“Written suggestions and positions have also been received from ordinary citizens,” he added.