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Tax reform and economic trends in Cyprus and Greece

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2026-08-16 06:56 UTC → 2026-08-16 10:03 UTC · added ~~removed~~

Economic reports and policy discussions in Cyprus and Greece highlight shifting fiscal landscapes and tax structures. In Cyprus, a Central Bank study indicated that recent tax reforms disproportionately benefit high-income earners, with the top 10% of the population gaining approximately €1,057 annually while the poorest 10% receive only €5. In Greece, data from the first quarter of 2026 showed that while household disposable income rose by 3.2%, final consumption grew at a faster rate of 4.7%, leading to a decline in savings. In response, Greek authorities are preparing a comprehensive fiscal package for an upcoming IMF review. To expand fiscal space, the government intends to leverage permanent revenues from energy-related clauses and crackdowns on tax evasion. The plan aims to distribute available fiscal space gradually through 2030. Key proposals for self-employed professionals include a ‘consistency bonus’ to gradually reduce presumed income thresholds based on tax compliance. To improve liquidity, the government is considering significant reductions in tax advances, specifically lowering the rate for self-employed individuals from 55% to below 40%, and for legal entities from 80% to between 50% and 55%. Further measures include the potential abolition of the professional occupation fee, which could provide relief of approximately 240 million euros. Long-term objectives involve reducing the corporate tax rate to 20% over four years and cutting employer social security contributions by 170 million euros to lower non-wage labor costs. These interventions are projected for implementation through 2027 and beyond.

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