25 June 2025 - Volt Demands Tax Equality
A report published today in “Phileleftheros” reveals that during the period 2021–2023, a total of 25,277 employees who relocated to Cyprus received tax exemptions amounting to €406.6 million. These figures confirm that the current system of tax incentives exacerbates inequality, creates a two-tier workforce, and selectively shifts the burden of public revenue onto low-income earners.
Volt recalls it’s fundamental principles of sound taxation that it has already been presented to the public: effectiveness, simplicity, and sufficiency. In parallel, it upholds horizontal equity (where every citizen with similar economic circumstances is taxed equally), vertical equity (where those with greater financial capacity contribute proportionally more) and intergenerational equity ( where each generation is expected to meet its own needs). Thus, if a high-income earner pays no income tax for 17 years, their share must be covered by another citizen. A fair tax system should distribute burdens proportionally, reduce distortions, and adequately fund public services.
Within this framework, Volt:
• Rejects the extension of the current tax exemption regime. It proposes reducing the duration of the new tax resident incentive from 17 to 7 years, and raising the minimum eligible annual income to €100,000, with non-retroactive application.
• Supports the automatic adjustment of tax brackets based on inflation (every three years), to avoid the indirect tax increase on salaried workers caused by inflation (fiscal drag).
• Deems the revision of the proposed “Minds in Cyprus” legislation very necessary. Without a ceiling and meaningful offsetting measures, the plan leads to further erosion of the tax system’s progressivity.
• Insists on effective anti-tax evasion measures, noting that the direct tax base appears relatively small for Cyprus.
Volt proposes:
• The enforcement of the automatic taxpayer registration (including VAT) and the requirement for all citizens to submit simplified tax returns.
• A simplified electronic asset declaration (Pothen Esches):
o For those holding significant assets — with linkage to the Land Registry.
o Mandatory asset declarations for self-employed individuals.
• Targeted tax reliefs tied to specific added value (e.g. job creation for Cypriots, technology transfer, investment in R&D). The logic of horizontal “up to 50% discounts” for so many years does not serve sustainable growth and only generates distortions.
Volt remains available to society and institutions for an open, evidence-based dialogue on tax reform, aiming for a fair and sustainable future for all.