Nikos Christodoulides: The Tax Reform's goal is for Cyprus to be a pole of attraction for quality investments

"Continuing investment in innovation, quality and reliability, so that Cyprus becomes a pole of attraction for quality investments and a factor of security and stability in the wider Eastern Mediterranean region," has been defined the goal of the tax reform by the President of the Republic, Nikos Christodoulides.

Referring specifically to businesses, Christodoulides indicated that the deemed distribution of dividends is being completely abolished and the withholding tax on the distribution of actual dividends is being significantly reduced to 5%.

He then pointed out that the fair burden, the more effective tax treatment of profits, with a parallel increase in corporate tax to 15%, demonstrate the government's clear will to strengthen the country's productive fabric and enhance the country's international image and credibility, which for our governance is a top priority.

"The goal," he emphasised, "remains to invest in innovation, quality and reliability, so that Cyprus becomes a pole of attraction for quality investments and, of course, a factor of security and stability in the wider Eastern Mediterranean region."

"The aim" he continued, "is to strengthen the real economy and the competitiveness of Cypriot businesses that create well-paid jobs and, above all, to strengthen the disposable income of citizens in a time of many challenges."

Read the full address of the President of the Republic below, translated from the original Greek:

It is with great pleasure that I welcome you to the Presidential Palace for an important event that marks a New Chapter for our country's tax policy and, by extension, for our country's economy.

Today, after 23 years, we present, in collaboration with academics, technocrats, and experts, whom I thank, a comprehensive framework of recommendations for the substantial tax reform of our country.

An important Reform of particular political, economic and social importance, in a changing Cyprus, which ensures a fairer distribution of income, which limits social inequalities and which strengthens economic and social cohesion in our country.

A Cyprus that is changing with a tax system that is more efficient, fairer, and more adapted to modern challenges and needs.

The Cypriot economy is recording one of the highest growth rates in the Eurozone, we have full employment conditions, a strong fiscal surplus and a steady reduction in public debt. The responsible fiscal policy that is being followed is bringing results and allowing for targeted social interventions by the State.

And all this, in the midst of two wars and with the powerful economies of Europe being placed under surveillance. The growth path of our economy, of course, is not leading us.

On the contrary, taking into account all the challenges, and there are many, internal and external, we are moving forward with determination, with a clear plan and planning, in the tax transformation of our country, strengthening the competitiveness of our economy and its further development.

The Tax Transformation that will be presented today, the product of consultation with all stakeholders, is a Government initiative that responds to the needs of citizens and businesses.

This tax reform reflects in practice our political ideology as a Government, that of Social Liberalism, but also the imprint of our anthropocentric approach.

Moreover, tax policy is not a neutral technical process, it is primarily a political act, a political decision that reflects the compass of social justice and development.

The aim, therefore, is to strengthen the real economy and the competitiveness of Cypriot businesses that create well-paid jobs and, above all, to strengthen the disposable income of citizens in a time of many challenges.

At the center of our political approach, within the framework of social liberalism, is the Middle Class, which is the foundation of every prosperous and democratic society.

Within this framework, we propose a substantial increase in tax-free income for individuals and a series of significant tax deductions that take into account the needs of households and family composition, exceeding what we had set as a pre-election target in relation to tax-free income.

At the same time, our young people are essentially supported, while, at the same time, tax relief incentives are given for both parents, in the case of families, further encouraging the employment of women and responding to structural, long-term distortions, such as demographic and housing.

We know very well and have proven it in practice with the various Housing Programs and Plans that we have been implementing from the very beginning, that a modern state cannot ignore issues that concern the Young Generation, especially with regard to housing.

Within this context, in our Tax Reform we place particular emphasis on facilitating the acquisition of a first home, while, at the same time, we also have major goals and are strengthening the effort for the green and digital transition.

In relation to Cypriot businesses, we are completely abolishing the deemed distribution of dividends and significantly reducing the withholding tax on the distribution of actual dividends to 5%.

The fair burden, the more effective tax treatment of profits, with a parallel increase in corporate tax to 15%, demonstrate our clear will to strengthen the country's productive fabric and to enhance our international image and credibility, which is a top priority for our governance.

The goal remains to invest in innovation, quality and reliability, so that Cyprus becomes a magnet for quality investments and, of course, a factor of security and stability in the wider Eastern Mediterranean region.

The Reform and the proposals that will be presented, I repeat, reflect our political approach, Social Liberalism.

With the collaboration of reputable experts, under the coordination of the University of Cyprus' Economics Research Centre which I would like to thank again, high-level scientific data and international best practices were utilised, and today a fiscally balanced reform with a real social impact is presented.

In closing, I would like to note that ensuring a decent standard of living for all, supporting the family and the new generation, addressing housing and low birth rates, encouraging women to join the labor market, promoting the green and digital transition and of course tackling tax evasion, are key objectives of our Tax Reform.

Warm thanks to all the contributors to this great effort, as well as to all of you who contributed with your knowledge and ideas to charting this new course in a changing Cyprus.

We are moving forward decisively, we have a plan and a clear design on the path of an ambitious, substantial tax transformation, which will take into account the many and not the few, for the benefit of the overwhelming majority of Cypriot citizens.

(Source: InBusinessNews)