Officials acknowledge issues as new tax system takes effect on January wages

Nicosia, Cyprus. Officials said on Monday that problems have emerged with the new tax system introduced at the start of the year, adding that some issues stem from a lack of public awareness. Tax Commissioner Sotiris Markidis briefed MPs on the rollout nearly a month after it took effect.

Guidance and public outreach

Markidis said the tax department’s website has published a guide and an FAQ to help people understand which tax exemptions and deductions they are entitled to based on household income and family status. He added that the Chamber of Commerce and the Employers and Industrialists Federation have been holding workshops to provide tax guidance to individuals and businesses.

To date, about 10,000 people have attended the seminars.

January wages and higher tax-free threshold

Markidis said January will be the first month in which wages are affected by the new tax regime. He said all taxpayers should see an increase in net salary following the rise in the tax-free threshold.

Effective January 1, the personal income tax-free threshold increased from €19,500 to €22,000.

T59 form difficulties

Markidis said one issue involves the T59 form, which individuals, but not corporate taxpayers, submit to apply for tax discounts. He said some people are having difficulty completing the form because they are unsure which discounts they qualify for.

He said individuals need to become informed, calculate the discounts themselves, and ask their employer to make the necessary deductions from their salary.

Have you checked which tax exemptions and deductions you are entitled to under the new system?