New tax framework falls short of circumstances and expectations
22 December 2025, AKEL C.C. Press Office, Nicosia
The new tax framework, as approved today by Parliament, falls short of the circumstances and expectations that the Government itself created with its announcements.
After 23 years, there was an opportunity for meaningful reform that would benefit the vast majority of society. However, the government, through its actions and the absence of comprehensive consultation, threw away a golden opportunity for changes that would have led to a simpler, more effective, and fairer tax system.
AKEL submitted comprehensive proposals in a timely manner to the public debate with the aim of progressively transforming the tax system, strengthening tax justice, and enhancing the state’s tax collection capacity.
However, the government, the pro-government coalition parties, DISY, and far-right ELAM all rejected AKEL’s proposals for a fairer distribution of the tax burden with an increased contribution from very high income strata and wealthy fortunes, depriving the state of many millions that would provide support to low-middle income strata and small-medium enterprises that are currently struggling with the high cost of living.
AKEL once again acted with consistency in the interests of society and the economy, improving the tax framework with proposals such as increases in tax deductions for children and housing expenses. Through its persistence, it secured the exemption of the Provident Funds and voted in favor of provisions to combat tax evasion.
However, the effort does not stop there. In the new year, AKEL’s proposals for reducing indirect taxes, such as imposing a permanently reduced VAT on electricity and zero VAT on essential goods, will be tabled in Parliament.
At the same time, proposals to tax the super profits of the banks and energy companies will be re-tabled.
The dilemma remains quite clear: do we support society or serve powerful interests.
AKEL has stood by society through its pratcical actions and will continue to do so.
