04/32. Your money and wealth

04/32. Your money and wealth

Tax and VAT changes

[Full disclosure for transparency: Most persons will financially benefit including my family and I]  

  • The tax-free personal income threshold will be increased to €xxx,xxx per year. (Figure will be in my 22 January 2023 manifesto final version.)
  • Social insurance contributions for the lowest paid will be reduced.  
  • Capital gains tax on primary residences of 5 years or more will be phased out. When the country can afford it, this tax will be abolished. This initiative will be funded by increasing capital gains tax and transfer tax on holiday homes owned by non-Cyprus residents. Senior executives of international companies that create substantive employment in Cyprus prior to 2026 will receive additional capital gains tax breaks on property and office buildings. Furthermore, my radical approach to the Cyprus problem proposes that capital gains tax and transfer tax will not apply to property returned after a settlement. 
  • To help our restaurant and hotel industries, which historically have often been owned by several generations of Cypriot families and have suffered due to Covid and all-inclusive hotels, the cost of eating at VAT-registered restaurants and staying at hotels can be deducted from personal tax, up to a maximum 2% annual income (with a ceiling), subject to paying with credit or debit cards and keeping receipts.
  • The tax system will be simplified for the lowest paid, and the salary threshold for audited financial statements increased. 
  • To create more affordable rental housing, private individuals and developers will be given incentives. A study will be commissioned in 2023 and feedback sought from all stakeholders.       
  • The VAT on female menstrual hygiene products will be zero. Don’t politicians have daughters and granddaughters that must buy such items? I hope all EU countries follow my lead.
  • The EAC and CYTA will pay interest on customer deposits via a yearly credit to all their customers. It will be at the best commercial rate available backdated to 1/1/2017. If CYTA or the EAC do not earn bank interest because they run overdrafts, parliament will dictate the interest rate that must be paid. I invite other organisations in the private sector including telephony and utility providers to follow my lead.
  • The state currently funds short-term government debt via treasury bills and other market instruments it pays interest on. A study will be commissioned in 2023/4 to review how surplus cash reserves are managed by villages and municipalities, and whether these reserves can be used in parallel by the state. As it currently stands, it is similar to having two bank accounts. One earns interest, the other pays interest at a higher rate. The only winner is the bank who welcomes customers that borrow their own money.

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