Cyprus tax revenues rise 5.9% to €3.1bn despite income tax reform drag

Generous middle-class relief in the new tax code cut personal income collections by 2%, offsetting broader gains in the first five months of 2026.

By Handelsavisen Newsroom · Automated 2026-07-05 05:51 UTC · 1 min read

Cyprus collected €3.1 billion in tax revenues during the first five months of 2026, a 5.9% increase year-on-year, according to data reported by Philenews.

The overall growth masks a significant structural shift in the revenue mix, driven by a sweeping tax reform that took effect on January 1.

While total collections surged by €171 million, personal income tax revenue fell by 2%.

While total collections surged by €171 million, personal income tax revenue fell by 2%.

The decline is attributed to generous tax allowances introduced for the middle class as part of the new fiscal framework.

These relief measures have directly reduced the yield from individual income, even as other categories of taxation expanded to drive the aggregate increase.

The data highlights the immediate fiscal trade-off of the government’s policy pivot.