Philenews

Tax Reform: New Interventions for Taxpayer Relief

Published December 30, 2025, 07:20
Tax Reform: New Interventions for Taxpayer Relief

The government has overcome initial obstacles in the tax reform, however, further interventions from political parties are expected to provide additional relief to taxpayers. Opposition parties are proposing additional support measures for those below the €22,000 tax threshold, beyond the tax deductions already agreed for the middle class. Specifically, AKEL proposes reducing VAT to 5% for electricity services, home renovations (including extensions and energy upgrades), and zero VAT on essential goods. It also proposes taxing the excess profits of banks and renewable energy companies, which is causing controversy with parties such as DISY and DIKO. ELAM seeks to broaden the framework of tax neutrality for the restructuring of non-performing loans, regardless of the date of their granting, and to introduce conditions to prevent abusive practices. It believes that the reinstatement of the regulation that was in force until 2017 would accelerate restructurings and protect borrowers. The Ecologists propose the application of 5% VAT on the installation of solar panels in private and public homes, while Alexandra Attalidou proposes zero VAT on basic necessities. The Ministry of Finance has already expressed its opposition to the proposals, noting that the regulations related to reduced VAT are already being implemented.