The six bills that make up the government’s tax reform were presented to MPs at the House finance committee on Friday, with Finance Minister Makis Keravnos describing the package as “exceptionally important” and the most extensive reform to date.

He said the changes would be “beneficial for future generations.”

Keravnos said the new framework aims to reduce inequality, correct long-standing distortions, and remain fiscally viable and aligned with EU obligations.

The reform seeks to create a fairer distribution of the tax burden, boost economic competitiveness and support households.

The minister acknowledged that the timing may be inopportune, as parliament must examine state and ministry budgets before year’s end, but noted that the original deadline for the tax bills had been the end of August. The cabinet approved the proposals on October 29, prompting their submission now.

Keravnos apologised for any inconvenience and said the ministry stood ready to provide clarifications to assist MPs.

He expressed hope that the reforms would be evaluated objectively and not through “petty politics.”

Earlier, committee chairwoman Christiana Erotokritou said that parliament would not adhere to tight deadlines in examining the bills, according to Stockwatch.

Keravnos said the reform would ease the burden on families, especially those with children, and address key household concerns, including housing and energy upgrades.

It also aims to strengthen the competitiveness of businesses, curb tax evasion and safeguard public finances in line with European standards.

Keravnos said the bills included provisions emanating from the Republic’s obligations in the framework of the national recovery and resilience plan and was linked to the payment of €190 million, expected to arrive in the first half of 2026.

Among the measures is a reduction of the lump sum for extending non-domicile status from €1.25 million to €250,000 for a five-year period, designed to boost Cyprus’ competitiveness.

For individuals, the non-taxable income threshold rises from €19,500 to €20,500.

The non-taxable amount for compensation in cases of voluntary resignation increases from €20,000 to €200,000, meeting a long-standing trade union demand.

Other reforms improve the environment for businesses, provident funds and pensions, offer tax exemptions for spouses and partners, multi-member families and single parent families, increase grants for vulnerable families and reduce interest rates for the purchase of a home, energy upgrades and electric vehicles.

The reforms also include subsidised home insurance for natural disasters and personal insurance for partial or full disability.

Company tax rules are improved, and several contributions are abolished to encourage business activity, innovation and capital investment.

Keravnos said initial estimates projected a surplus of €112 million from the reforms, but subsequent revisions reduced this to €18 million.

Responding to public concerns, the minister stressed that the reform would support low-income groups.