Intense concern over the impact of provisions in the tax reform bills on the attractiveness of Cyprus as an investment destination is prevailing in the market, while the public consultation on the bills continues and has been extended by government decision, in a positive response to a relevant request from economic stakeholders, until 10 September.
The six bills are also under the microscope of Invest Cyprus, which is currently studying them in detail, naturally and as can be expected, giving greater emphasis and weight to the provisions related to foreign investments.
As InBusinessNews has been informed , the Board of Directors of Invest Cyprus is expected to meet in the coming days - most likely within the next week - to evaluate the bills in their entirety and prepare its opinions and recommendations, which it will then submit to the Ministry of Finance and the Tax Department.
At the same time, the organisation also expects opinions from key stakeholders with whom it collaborates and which also deal with foreign investors, such as TechIsland, etc.
The market is concerned
However, a well-informed source with knowledge of the market and foreign investments expressed strong concern about the turn things have taken to InBusinessNews, even warning of the derailment of the entire effort.
As he explained, the bills contain issues that were not the subject of consultation nor were they included in the presentation that took place a few months ago at the Presidential Palace.
Furthermore, he added, although the bills have included things that had been announced, the way in which they are reflected in the bills also causes concern.
"Unfortunately, we cannot be as positive about the bills, as they have been prepared and put up for public consultation, as we were about the proposals that were submitted to us in the context of a presentation at the Presidential Palace."
"The whole situation is deeply concerning," he pointed out.
Extension of public consultation necessary
Asked to say whether, in light of developments, an extension to the public consultation period is required, the same source responded in the affirmative.
"It is wise and reasonable - I believe - on the part of the Government to grant an extension of a few weeks, so that the Government itself can see how it will handle the issue," he added.
And this is because - he continued - while they presented some proposals, which were positively received by both the business world and professional associations and foreign investors, the bills created intense concern and even reaction.
Therefore, he pointed out, "the Government also needs some time to see, I repeat, how it will now handle the issue and the situation, as it has developed, as well as in what way/ways something can be corrected."
Asked whether he believes that the goal of implementing the tax reform by 1 January 2026, is feasible, the same source estimated that "with the climate as it has developed today, there is a risk that the entire project will be derailed, with all the negative consequences that this entails, if some provisions that cause concern in the bills are not changed."
"Therefore, we may not have time to achieve the goal of implementing the reform as of 1 January, 2026," he concluded, expressing, however, the hope that the Government will listen to the concerns and make all the necessary changes in order to proceed and implement the tax reform correctly.
(Source: InBusinessNews)
