The new Chairman of the Fiscal Council, Andreas Charalambous, has brought to light an interesting finding regarding tax reform.

During the presentation of the interim report for 2026, Mr. Charalambous observes that the reform not only fails to reduce inequalities among social classes but actually leads to a worsening of the situation.

ANDREAS CHARALAMBOUS—Chairman of the Fiscal Council“
Any tax relief provided through the tax system primarily benefits high-income groups. Consequently, as reflected in the Fiscal Council’s Report, from the perspective of social inequality, the reform did not yield a positive result; on the contrary, it led to a slight worsening of inequalities.”
 
The Cypriot economy is showing positive indicators, he noted; however, there are visible risks that we must anticipate and address in advance.

ANDREAS CHARALAMBOUS—Chairman of the Fiscal Council“
“We are gradually entering an election season, and during such periods there is an increased risk—and increased fear—of overspending.”

He emphasized that there is enormous room for improvement in how major projects are evaluated and planned, citing the electricity interconnection and the Vasilikos project as examples.

ANDREAS CHARALAMBOUS—Chairman of the Fiscal Council“
Nevertheless, a study must be conducted to assess the scope of the issue and determine whether the financial support required or the cost that would result from such a project is compatible with the other goals we.”

At the same time, he pointed out that the green transition is more necessary than ever, given the situation in the region and our dependence on fossil fuels, which pose one of the greatest risks to the economy.
 
In a few years, he noted, there will be a major demographic problem.

ANDREAS CHARALAMBOUS—Chairman of the Fiscal Council: “While
today we have four workers supporting one retiree, in the future the ratio will be two to one.”
 
He opposed any reduction in the 12% penalty, while noting that provident funds should become mandatory.

See the report by Kleio Vourkou:

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