Filenews 23 May 2024
The Minister of Finance presented the main axes on which the tax reform will be based, as well as the goals it will seek to achieve, in his address to the Conference on Tax Reform and Economy.
In particular, Makis Keravnos said that the tax reform provides for the creation of a tax model that is fairer and through it promotes transparency for the citizens and taxpayers of Cyprus, but also of the international community.
The main axes of the tax reform are the broadening of the tax base, the increase of employment and competitiveness of the Cypriot economy, within the framework of international and European standards, the promotion of innovation and the green transition, with evolutionary prospects, as well as the fairer distribution of the tax burden, maintaining the sustainability of public finances, through a simplified tax system that reduces administrative burdens and the burden on taxpayers.
More specifically, this tax reform focuses on:
– The promotion of investments and reduction of business risk,
– The utilization of other forms of taxation for a specific purpose, such as green taxation,
– The reduction of the shadow economy and tax evasion and,
– the creation of a fair, effective and competitive tax framework.
Trust in the JIT
Mr. Keravnos reminded that the Ministry of Finance has commissioned the Centre for Economic Research of the University of Cyprus to prepare a comprehensive study on the evolution of the legislative tax system through Research Cooperation. The entire work is expected to be completed by the end of the first half of 2025, with the submission to Parliament of the new proposed modern legislative framework.
The Finance Minister argued that the Centre for Economic Research has the tools, know-how, supporting work and macroeconomic analysis that will accompany the study in question, in order to extract valid results for the tax framework, both for the existing and the upcoming one. The work of the JIT will be complemented by professionals in the field of taxation and tax reforms.
The consultation
As part of the overall planning of the holistic tax transformation, a broad public consultation has already begun with all stakeholders of the economy. The consultation consists of at least three stages, i.e. consultation at the start, when defining the preliminary framework and when drafting legislation.
In this context, all contributions of private and public bodies will be properly evaluated. The public consultation for the first stage of the project's implementation has already taken place, where stakeholders are invited to submit their views and suggestions.
In addition, the Ministry of Finance appeals to those who have not participated to submit their views on the website of the VIU of the University of Cyprus as soon as possible. The progress of the work and the findings up to this stage will be presented around mid-June, 2024, at the third conference in a row that will be organized jointly between the VIU and the Ministry of Finance.
The involvement of society in shaping the renewed tax framework is important for the ministry and that is why there will be full transparency at all stages of this process, concluded Makis Keravnos.
