Philokypros Roussounides: CCCI anticipates a positive impact from the proposed Tax Reform

The Cyprus Chamber of Commerce and Industry (CCCI) views the proposals of the University of Cyprus’ Economics Research Center (CypERC) on the promoted tax transformation with positively and, after evaluating them in their entirety, will submit its views, in order for the entire effort to proceed and be implemented within the timetables that have been set.

On the positive side, the Chamber notes the abolition of deemed dividend distribution, the reduction of the withholding tax on actual dividend distribution from 17% to 5% and the increase in the amount of tax-free income.

In fact, with regard to the reduction of the withholding tax on dividend distribution, the CCCI believes that in this way a distortion that exists and constitutes a competitive disadvantage for Cypriot entrepreneurs compared to foreign entrepreneurs investing in Cyprus will be corrected.

"A reform that had to be done and is being done after about 23 years"

More specifically, and invited by InBusinessNews to comment on the CCCI's proposals for tax transformation, the Secretary General of the CCCI, Philokypros Roussounides, after welcoming the initiative to modernise and simplify the tax system, emphasised that "it is a reform that should have been done and is being done after about 23 years."

As he said, "the announcement of the recommendations of the technocratic group of the Economics Research Centre (CypERC) of the University of Cyprus shows that we are finally entering the final stage of shaping a new tax framework."

According to Roussounides, everyone's goal is the development of the economy, the fair distribution of tax burdens, "as well as, of course, maintaining and further strengthening foreign investments."

"It seems that the measures announced and intended to be submitted by the Government to Parliament for voting are both targeted and cover a wide spectrum of the economy, without excluding our fellow citizens, since we see that the amount of tax-free income will increase, as well as some other targeted parametres that have to do with the families and family status of our compatriots."

With regard mainly to businesses, the Secretary General of the CCCI described as very important the abolition of the deemed distribution of dividends, as well as the reduction of the withholding tax on actual distribution of dividends from 17% to 5%.

This, he indicated, "balances, corrects a distortion that existed and caused a competitive disadvantage for Cypriot entrepreneurs in relation to foreign entrepreneurs investing in our country."

"Therefore, I believe that these are also among the positive aspects of the reform being promoted," he underlined.

Corporate tax increase

In relation to the increase in corporate tax from 12.5% ​​to 15%, Roussounides stated that "we should wait to evaluate this, but at first glance it certainly strengthens the feeling of our country's credibility as an investment destination."

"This, combined with the triple upgrade that our economy had a few months ago, we believe will greatly help the credibility of our country, as well as how we market our country abroad, how third parties see us, and I hope that it will also have a positive impact on investment," he highlighted.

Asked if they see the recommendations for businesses in a positive light, the Secretary General of the CCCI, after answering in the affirmative, clarified that "over time, the role of the CCCI is not only businesses and entrepreneurs, but it is certainly also the economy, as well as social welfare."

"One cannot exist without the other," he pointed out, underlining that "therefore, we believe that in these two pillars, there will be a positive impact from the measures recommended by CypERC."

"We have been demanding this tax transformation for a long time, however, in order to be able to go into more details, we should be given a little more time to study the framework that was announced in its entirety," he continued, noting in conclusion that the Chamber, after studying the CypERC recommendations, will submit its positions and opinions to the Center within the three-week timeframe that has been set, in order to complete and promote the tax transformation for passage.

(Source: InBusinessNews)