The government must respond to society regarding tax reform

Written statement by AKEL Political Bureau member and Head of Economic Policy Haris Polycarpou

27 August 2025, AKEL C.C. Press Office, Nicosia

Nikos Christodoulides must understand that tax reform will not be achieved by issuing ultimatums.

If the government had wanted to listen to proposals during the two years it has been discussing tax reform, it would have found the time to invite the political parties to engage in a dialogue, instead of making public announcements and setting targets for the implementation of the reform that it knows cannot be achieved.

AKEL believes that such issues are advanced through substantive discussion and not through empty statements, which is precisely why, after AKEL’s insistence, a meeting has been scheduled between the Minister of Finance and the political parties in September, at which he will attend and submit his own proposals.

Apart from this, it is Mr. Keravnos himself who owes answers first and foremost to society. If he believes that a “fairer distribution of benefits for all taxpayers” means that those in the highest income brackets should receive large tax cuts, but those in the lower income brackets, and especially those below the tax-free income threshold, pay more taxes. He should explain why the reform does not affect accumulated wealth and he should give an answer as to what will happen to indirect taxation and green taxes, given that the reduced VAT rate on electricity will end in 2026.

AKEL believes that the reform must go ahead, but working people and society should not once again be the ones paying the price.