Reducing the tax burden on Cypriot businesses in order to increase their competitiveness and exports, shifting to a green economy and digitalization, combating tax evasion and making Cyprus more attractive as a destination for quality investments are the main principles on which the government bases its policy for 2025 with the aim of creating a strong, sustainable and competitive economy.
Speaking during the presentation of the government’s 2025 plan, President of the Republic Nicos Christodoulidis expressed pride in the Cypriot economy, estimating that it will continue to grow at one of the highest growth rates in Europe.
At the same time, he focused on the government’s business support policies, including the establishment of the Business Service Center. At the same time, among other things, the tax burden on Cypriot businesses is expected to be reduced in order to increase competitiveness and exports.
He even announced that Cyprus’ inclusion in the Visa Waiver Program with the US will be completed in 2025, while within a year the government’s top priority is to complete technical preparations for Schengen accession.
These two developments are expected to give an additional impetus to entrepreneurship and strengthen the efforts made by our country to become an international business center.
Pointing to the instability in the region and the fact that influential European countries are under scrutiny, President Christodoulidis noted that the successive upgrades by all leading rating agencies have led, after 13 years, to the achievement of investment grade A.
“A vote of confidence in the economy and in the responsibility of our politicians,” he said, which translates, as he pointed out, into improved living standards and concrete results such as:
- Attracting quality investment.
- New high-paying jobs.
- Job security and wage increases.
- The possibility of a targeted social policy.
Considering that the first pillar of the set objectives is to ensure the development of the country through a strong, sustainable and competitive economy, Nikos Christodoulidis presented the most important actions that will be implemented in 2025 in order to achieve this goal.
It is worth mentioning that the President of the Republic
Tax transformation
“In 2025, we will build on the progress made and continue to act with the same responsibility,” said the President of the Republic and emphasized that this year is an important milestone for the tax transformation that will be put up for discussion in February.
This reform increases the disposable income of households and supports the development of Cypriot businesses.
For households, the tax relief will significantly strengthen the middle class and will contribute to addressing housing and key demographic issues, among others.
The President announced that the tax burden will be reduced for Cypriot businesses in order to increase competitiveness and exports.
Pension reform
The President of the Republic spoke about the launch of the pension reform, the main goal and aspiration of which is to ensure decent pensions.
According to him, the investment policy of the Social Insurance Fund is being modernized, the institution of occupational pensions is being strengthened, especially for the private sector, and the social security system is being improved.
Housing
In order to meet the housing needs of more citizens, the state will allocate even more funds – the budget will amount to 75 million euros. In particular, among other things, the following will be implemented in 2025:
- A new plan to distribute land to communities at a rate of 25% of their value,
- A revised plan for young people under the age of 41 with support of up to €50,000,
- Revised Social Welfare Service housing plans to reach more young displaced people.
At the same time, as part of the refugee policy and in order to provide special assistance to our young displaced persons, the President of the Republic announced a 20% increase in funding for all housing projects covering rural, mountainous, remote and disadvantaged areas.
“Through our integrated approach to housing, we are also contributing to a significant revitalization of rural areas, for which we are implementing additional programs worth more than 30 million euros,” he said.
Primary Sector
A primary sector strategy will be launched in 2025, including a number of interventions such as:
- Creation of a financial instrument exclusively for farmers, facilitating their access to finance by using government subsidies as bankable collateral, thereby addressing the perennial weakness of the rural world,
- Further shortening the timeframe for payment of compensation,
- Utilizing technology to improve yields and increase the income of our farmers.
Tourism
In 2025, a policy and incentive system for the creation of theme parks will be announced, while the first phase of the tender process for the Paphos marina project will be announced in the first half of the year.
At the same time, the government, in cooperation with local authorities and the private sector, will continue its targeted actions to modernize selected tourist destinations in our country.
Transportation
Speaking also about the shipping sector, President Christodoulidis emphasized that the ship registry has seen an 18% growth in the last 16 months.
“To further develop the sector, we are implementing policies to attract and develop services similar to shipping, such as digital technology and services related to pleasure craft,” he said.
Development projects
“Serving the public interest drives all our decisions,” the President of the Republic emphasized, citing the courage shown by the government in terminating problematic contracts.
In order to eliminate long-term distortions related to the delay or non-performance of government contracts, the President mentioned the modernization of the legal framework and the implementation of a new Electronic System, which will ensure efficiency in the process of completing major projects and increase transparency.
The plan for 2025 envisages the promotion of the following major projects with a total budget of more than 1.3 billion euros:
- Improving transport accessibility and reducing congestion in Nicosia through the implementation of the next phases of the County Road, with an estimated cost of €120 million,
- The relevant documentation for the Akaki-Astromeritis highway, at an estimated cost of €107 million, is currently being finalized.
- To address traffic congestion in Limassol, projects totaling over €250 million are underway, including the launch of the first phase of the Northern Bypass,
- Studies are being completed for the second phase of the highway to Saittas at an estimated cost of 65 million Euros. euros,
- Implementation of the Larnaca port and marina projects begins under a new process agreed with local city stakeholders
- Both phases of the Paphos-Polios Chrysochous four-lane highway are being realized at a cost of 330 million. euros,
- Infrastructure projects are planned and construction starts in the Free Province of Famagusta at a cost of 60 million. euros. The project in Potamos tou Liopetriou will start with the delivery of the first phase in summer 2025.
- Expansion of the port in Latchi at a cost of 50 million euros,
- Construction of an industrial port in Vasiliko at a cost of 350 million euros.
Other important policies for 2025:
- Redemption payments for depositors and bondholders will start in the first half of 2025.
- In cooperation with the social partners, the modernization of the ATA will be promoted, the institution of collective bargaining will be expanded, the minimum wage will be adjusted, and undeclared employment will be addressed. In addition, a Plan for the integration of minimum guaranteed income recipients into the labor market is being implemented.
- In order to strengthen the labor market and the return of Cypriot scientists to their homeland, a repatriation campaign is being launched with benefits and incentives for them to move to our country.
- In the area of research and innovation, funding is provided for the first time to facilitate the commercial operation of production lines for innovative technology products and services.
- To support entrepreneurship, a Business Service Center is promoted, which will be the first point of contact between investors and the government and will provide personalized information and assistance in obtaining licenses.
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