Filenews 25 November 2025 - by Theano Thiopoulou
The strategic aspirations, challenges and needs for the next year are recorded by the Ministry of Finance in a document entitled "Annual Action Plan 2026", presenting the actions implemented in 2025.
The challenges are listed in nine objectives:
1) Ensuring macroeconomic stability;
2) Ensuring fiscal discipline and sound public finances,
3) Compliance with the new financial governance framework of the European Commission,
4) Ensuring financial stability;
5) Ensuring an effective financial regulatory framework and reducing private debt and non-performing loans,
6) Promoting sustainable development and job creation,
7) Ensuring the sustainability of the current account balance;
8) Increase productivity in the public service,
9) Successful management of issues within the framework of the Cyprus Presidency of the Council of the EU.
The Ministry of Finance states in detail for each goal what measures are taken, such as the promotion of economic policy to address challenges, such as inflation.
The ultimate goal is growth and job creation.
The interventions concern the targeted staggered subsidy of the electricity consumption charge price for the special residential tariff for specific categories of vulnerable consumers (Code 08) and the bimonthly tariff for commercial use of single low voltage input (Code 10) only for tariffs from 1/1/2026 -31/12/2026. Imposition of a zero VAT rate on certain products from 1/1/2026 – 31/12/2026 and reduction of the VAT rate on electricity for domestic use from 19% to 9%, from 1/4/2026 – 31/12/2026.
Strengthening the competitiveness and resilience of the economy through reforms aimed at addressing the modern needs of the business environment has a cost of €108.5 million.
The interventions concern: Equity fund, Cyprus National Promotion Agency, voting of primary and secondary legislation and appointment of a board of directors. Also, the modernization of the Companies Law, a strategy to attract foreign companies and talent, the launch of a framework for the control of foreign direct investments from third countries, the start of the implementation of an action plan to strengthen the governance framework of state entities, tax reform.
For the monitoring and formulation of policies/actions for the banking sector and private debt, the interventions as recorded in the 2026 action plan are: a legal framework regarding the data exchange system and a credit bureau, an interest rate subsidy plan for mortgages with income criteria, a "rent for instalment" plan for non-performing loans of vulnerable households, privatization of the Cyprus Stock Exchange.
There are also actions to assess the risks related to the fight against money laundering or terrorist financing at a cost of €1.29 million.
The interventions include: repetition of the national JX/XT risk assessment and preparation of an action plan, preparation of a risk assessment of the financing of the proliferation of weapons of mass destruction and preparation of an action plan, strengthening of measures and prudential supervision in the real estate sector with the adoption of a relevant bill that will make all professionals obliged entities, supervised by the Tax Department, creation of a single supervisory framework for administrative services.
It also includes actions for adequate staffing and training of ELTIF in human resources (service market) and ensuring appropriate tools (software programs, training) for licensing and guidance as well as for case assessment and extension of the technical assistance received by the Republic of Cyprus from the UK, for the preparation of ELTIF in terms of operational organisation and capacity building of staff through specialised training.
In order to promote and implement modern policies and reforms with the aim of creating a modern and efficient public administration, the interventions concern: Introduction of teleworking in the public service, introduction of a regulation for the possibility of employment, with reduced working hours of specific groups of employees based on personal/family needs and extension of flexible working hours.
Further promotion and implementation of policies for the development and advancement of personnel and fair, transparent and modern methods of evaluation and selection for appointment/promotion, evaluation of the state payroll to rationalize and contain its growth rate, empowerment and development of skills for public service personnel.
