Nicosia, Cyprus. Three weeks into the rollout of the new tax system, the tax department has identified targeted adjustments aimed largely at easing the burden on natural persons, with the House of Representatives indicating readiness to adopt the proposed changes.
Proposed changes and parliamentary response
Tax Commissioner Sotiris Markidis presented suggested additions and clarifications to the Parliamentary Finance Committee, which responded positively. The additional fiscal cost of the proposed adjustments is not considered prohibitive.
Enforcement tools and revenue protection
Officials said the reform already adopted by parliament has strengthened the tax department’s enforcement tools, reinforcing tax collection while supporting efforts to curb tax evasion and safeguard state revenues.
Impact on employees and timing of declarations
Markidis told the committee that the department’s first priority was informing individuals, noting that January is the first month employees are paid under the new tax regime. He said all taxpayers who paid tax will see a reduction in the income tax they will pay, adding that they will receive a higher salary whether or not they submit the relevant declaration form because the tax-free amount has increased and more favourable scales are provided.
He clarified there is no immediate need for taxpayers to submit the relevant tax declaration form in January to benefit from deductions, as amounts declared later will be adjusted accordingly.
Declaration form structure and personal data
Markidis said one of the first practical issues identified during implementation concerned the structure of the declaration form. To avoid the inclusion of sensitive personal data, such as the number of children or overall family income, taxpayers must determine which deductions they are entitled to and calculate them independently.
How will the proposed adjustments affect your income tax and declaration process under the new regime?
