By March 2024, the first six phases of the tax reform project assigned by the Ministry of Finance to the Economics Research Centre of the University of Cyprus (CypERC), will be completed and then the preliminary proposals will be submitted, CypERC economist and member of the advisory committee for the project, George Syrichas told CNA.
Syrichas said that the tax reform project was expected to be completed within two years, and that the objectives were a new integrated tax system that, among other things, allows Cyprus to continue being a competitive financial centre, is simple, transparent, reduces inequalities, is efficient, is friendly to economic growth and employment, promotes innovation, supports the transition to a green and digital economy and ensures the sustainability of public finances.
Phase 2 of the project regarding green taxation and compensatory measures was currently underway, he added. He said that the impact on households and businesses from green taxes, for example on water, fuel and was
te have already been estimated.
He also said that the state will have revenue from green taxation, for example on water and other services, and that this revenue should be given back, as taxation should be fiscally neutral. He added that compensatory measures could be either refunds or incentives to further accelerate the green transition (photovoltaics, subsidies for electric vehicles).
Syrichas added that that all these estimations and proposals for compensatory measures in relation to green taxation will soon be given to the Ministry of Finance to be promoted as it is an EU obligation for Cyprus and was included in the Recovery and Resilience Fund, to be implemented in 2024.
In relation to the rest of the tax reform project, Syrichas said that Phase 1, which deals with recording macroeconomic trends, and Phase 3, which deals with experiences and practices at EU level and of other countries, were running in parallel and were almost complete. He added that these two phases together with Phase 4 which conc
erns the existing tax system of Cyprus, will be ready by March.
He also stated that Phase 5, which concerns the identification of relevant legislative regulations, has been completed, while Phase 6, which concerns empirical findings from other countries, will also be completed by March 2024.
All these Phases, which will be ready by March 2024, Syrichas said, will provide the basis on which they will start submitting proposals on what should be done specifically in Cyprus, based on the good practices that apply in the rest of the EU countries and internationally.
He said that after March, the progress of the works concerning Phase 7 of the project will be presented to all stakeholders, while the submission of the first preliminary proposals by the CypERC will follow. The submission of proposals concerns Phase 8 of the entire project, which is the evaluation and formulation of tax reform proposals, he said.
Source: Cyprus News Agency