Cyprus tax revenues down by 3% from 2013

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From January to July this year, the tax revenues have dropped compared to this time last year. Whilst it is only by 3% (€973.2m in total for 2014, and €1.002b for 2013) there have been significant drops in income tax paid by both public and private sector employees alike. The state collected €71,851m from income tax of employees from the broader public sector, a 19% decrease from last year. While self-employed individuals collectively paid 16% less than last year.

Immovable Property Tax (IPT) was the tax which offset all the losses from other areas, resulting in not such a noticeable deficit. €12.09m in 2014 compared to €5.99m for the same period last year. The new values for IPT were decided and released in 2013, so this perhaps has something to do with the steep incline.

Similarly capital gains tax rose this year, and revenues from the special contribution to strengthen public finances, which has been in place since 2012 marked a 56% increase. This tax applies to private sector employees and pensioners, self-employed individuals along with government employees. For the next two years the first eligible income band is €1,501 to €2,500 per month which currently has a 2.5 per cent tax rate. As a result of this special contribution and the IPT the current decline is set to be minimal.

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