Cyprus Finance Minister Gives Reassurance Over Tax Reform

by Lorys Charalambous, Tax-News.com, Cyprus

09 October 2001

In his annual budget speech, Finance Minister Takis Klerides reassured the Cyprus House of Representatives that the government would not use EU mandated tax reform as a cover for increasing revenue, and said that the government's ambition is the creation of a tax system characterised by simplicity and effectiveness.

However, he warned that the tax reform package would not include massive state handouts to the different departments, either in terms of tax relief or social benefits.

Mr Klerides outlined in his speech the economic achievements for the preceding year, including high economic growth, and the containment of both the inflation rate and the fiscal deficit, and urged ministers to look towards the three key priorities for the future: harmonisation with the EU, fiscal consolidation, and a fairer distribution of the tax burden.

The Finance Minister went on to say that although the economy in Cyprus is on relatively solid foundations, it could still be vulnerable to negative repercussions from recent events in America: 'Although the rates of growth so far and the fundamentals of the Cyprus economy are very satisfactory, these developments give cause for concern as regards the future course of the economy,' he observed.

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