Tax Reform in Cyprus: The Way Forward

With an emphasis on resolving alleged injustices in the individual taxation system, particularly for married couples, this study investigates the possibility of tax reform in Cyprus. Since each person in Cyprus is currently subject to separate taxes, married couples may be unfairly burdened by having larger overall tax obligations. The principal aim of the study is to investigate the viability and consequences of instituting a married couples allowance for individuals who are lawfully married. Additionally, the study intends to evaluate public perceptions of the benefits of such an allowance and the fairness of the current system. To achieve these objectives, a mixed-methods approach was employed, combining qualitative interviews with tax experts and quantitative surveys conducted with a representative sample of Cypriot citizens. Data on government revenue and potential costs associated with the reform were analyzed to evaluate the financial impact of the proposed change. Results indicate strong public support for a married couple’s allowance, with many respondents perceiving it as a fairer approach to taxation. However, the financial implications for the government would require careful consideration, particularly regarding potential revenue shortfalls. The study concludes by discussing policy recommendations and the balance between tax equity and fiscal responsibility.