The Cyprus Chamber of Commerce and Industry (Keve) and the Institute of Certified Public Accountants of Cyprus (Selk) have set out their views on the government’s upcoming tax reform, expressing both support and serious concerns as the public consultation draws to a close today.

In a six-page memorandum submitted as part of the consultation, Keve welcomed the government’s determination to tackle tax evasion and improve tax collection, describing this as a cornerstone for transparency and fairness in the market.

At the same time, it warned against changes that might undermine Cyprus’ competitive tax regime, which it said has long been one of the country’s strongest advantages for attracting foreign investment.

Keve stressed that the reform must strike a balance between supporting local businesses across all sectors, from industry and commerce to services, while preserving Cyprus’ appeal as an investment destination.

“This balance is decisive for strengthening the Cypriot economy, both by supporting domestic enterprises and by attracting foreign investors,” Keve said.

The chamber expressed satisfaction with certain proposals, such as the abolition of deemed dividend distribution for purely Cypriot companies and the reduction of the special defence contribution from 17 per cent to 5 per cent, which it noted had been a long-standing request of the business community.

It also voiced support for the efforts of the Ministry of Finance and the Tax Department to fight tax evasion within a framework of balanced fiscal policy, while emphasising that measures must be designed so as not to weaken Cyprus’ competitiveness.

Keve highlighted that corporate tax will rise to 15 per cent for all businesses.

It pointed out that Cypriot companies would in practice pay a lower effective tax rate, with the maximum falling to 19.25 per cent from 27.4 per cent today, and the minimum dropping to 15 per cent from the current 23 per cent.

Meanwhile, Selk adopted a markedly different tone in its own submission to the consultation, voicing disagreement with almost all provisions of the draft legislation.

While setting out its objections, the accountants’ body also submitted its own proposals, with its president Odysseas Christodoulou underlining the institute’s firm belief in continuously strengthening Cyprus’ value and credibility as a quality business destination.

“With the constant upgrading of the products and services offered, as well as through the simplification, strengthening and effective implementation of the country’s internal structures, processes and operations, we can deliver value-added services at competitive cost,” he said in a letter sent to Finance Minister Makis Keravnos.

Selk stated that any tax system must be based on three pillars, namely competitiveness, fiscal sustainability, and the safeguarding of social welfare.

According to information shared by local outlet InBusinessNews, Selk’s leadership will hold an extended meeting on September 10, 2025, with the Tax Commissioner for a thorough exchange of views.