Cyprus’ Ministry of Finance has set out its strategic objectives, challenges and planned interventions for the coming year in its 2026 budget while also reviewing actions implemented in 2025.

The document groups the main challenges under nine objectives, ranging from macroeconomic stability and fiscal discipline to financial stability, public-sector productivity and preparations for Cyprus’ EU Council Presidency in 2026.

It also includes compliance with the European Commission’s new fiscal governance framework and measures intended to support sustainable growth and job creation.

According to the ministry, each objective is backed by specific policy measures, including steps to address inflation, as the overall aim remains growth and employment.

In this context, the plan details interventions such as a targeted, graduated subsidy for electricity consumption for vulnerable households on the special tariff  and for the bimonthly business tariff, covering the period January 1 to December 31, 2026.

It also provides for a zero VAT rate on certain products for the same period, along with a reduced 9 per cent VAT rate on domestic electricity between April 1 and December 31 2026.

Meanwhile, efforts to strengthen competitiveness and resilience through reforms tailored to modern business needs carry a cost of €108.5 million.

These interventions include the creation of an Equity Fund, steps towards establishing the national promotional agency, changes to primary and secondary legislation, and the appointment of a board of directors.

They also cover the modernisation of the companies law, a strategy to attract foreign firms and talent, the introduction of a foreign direct investment screening framework (FDI), governance reforms for state entities, and tax reform.

For banking-sector policy and private debt management, the plan refers to work on the legal framework for a data-exchange system and credit bureau, an interest-rate subsidy scheme for housing loans based on income criteria, a rent for instalment scheme for non-performing loans of vulnerable households, and the privatisation of the Cyprus Stock Exchange.

There are also actions costed at €1.29 million to assess risks related to anti-money-laundering and counter-terrorist financing.

These include a repeat national JX/XT risk assessment and the preparation of an action plan, a similar process for risks linked to the financing of weapons-proliferation, and further preventive supervision in the real-estate sector.

Under the latter, a bill will make all professionals in the sector obligated entities supervised by the tax department, while a unified supervisory framework for administrative service providers will also be created.

At the same time, the plan includes measures for staffing and training, including the purchase of services, software and training tools for licensing and case assessment. It also provides for expanded technical assistance from the UK to support operational organisation and develop staff capabilities through specialised training.

Turning to public administration reform, the ministry lists actions to introduce teleworking in the public service, along with new regulations allowing reduced working hours for specific groups based on personal or family needs, and further expansion of flexible working arrangements.

Finally, policies on staff development, fair and transparent evaluation and promotion procedures, and a review of the state payroll to contain its growth rate will continue, alongside efforts to develop skills across the public service.