What industry stakeholders expect from the tax reform

The 8th Cyprus International Tax Conference has highlighted the impact of the upcoming tax reform on various sectors of economic activity, along with the expectations and challenges arising from its implementation.

Economic stakeholders who participated in a panel discussion at the recent conference agreed that the main goal of the tax reform should be to maintain the country's competitiveness while simultaneously promoting green growth.

At the same time, concerns were expressed about the upcoming implementation of green taxation, with the greatest concern being the impact it would have on competitiveness compared to non-EU international competitors.

The discussion between Joseph Merhi, Τreasurer, Federation of Building Contractors Associations of Cyprus, Charalambos Meivatzis, Partner, Head of Tax – President of the Tax Committee, Cyprus Bar Association and Thanos Michaelides, CEO, Thanos Hotels and Resorts and President of the Cyprus Hotel Association (CHA-PASYXE), offered an analysis of the anticipated impact of the upcoming tax reform on their respective sectors of activity, as well as the ways in which the three speakers believe any arising challenges should be addressed.

Michaelides described the reform as positive, emphasising that Cyprus' competitiveness will not only not decrease, but will increase.

As for the influence on the hotel sector, Thanos Michaelides said that the concern is that there are several instances involving old infrastructures and therefore, if there is excessive expectation for green goals, difficulties may arise for the sector.

"It must be ensured that the money from the green economy is used properly," he said, going on to underline, "Let's be careful how we advance the green economy through taxation," citing competition from international markets.

Merhi said the analysis began by examining the reactions to the increase in corporate tax to 15% through his communication with client businesses. Their first question, he revealed, was what would happen regarding VAT.

"This point has not changed and so generally the reaction was positive," he added, then stating that, "we need to look at the issue of the green economy holistically in relation to taxation."

"It is important to see how incentives are utilised for a green planet," he said, referring to the green agenda and taxation with a view to the successful outcome of the former.

Meivatzis focused mainly on the legal aspect of the implementation of the tax reform. He said characteristically that there is concern about some points of the reform and that details need to be provided regarding the legal framework. "We must be careful where we implement the reform, on a point to point basis," he recommended.

The tax reform does not offer much added value for international players, although positive results are expected for local businesses, was also an opinion he expressed, with incentives being a good move, as he argued, within a discussion that highlighted the specific points that require special attention.

(Source: InBusinessNews)