The Cypriot government has reached an important agreement. It is with three main political parties for tax changes. Finance Minister Makis Keravnos worked hard to get agreement. The Disy, Diko, and Dipa parties are included. This means the government will likely have enough votes. The reforms will help households with money. They want to start them by January 1, 2025. A vote in parliament is planned for December 22.
These tax changes are happening before the next elections. These elections are about six months away. The government says the tax system needs updating. It has not changed much since 2002. A key change is raising the amount of income people do not pay tax on. This will go from €19,500 to €22,000. Families with children will also get more help with deductions. The government expects to lose about €85 to €90 million in tax money.
Many families will save money. For example, a family with two children earning €30,000 could save nearly €900 a year. A bigger family with four children earning €60,000 might save almost €2,800. The more children a family has, the more they save. Minister Keravnos said, "There is a great convergence of opinions."
However, some parties are unhappy. The Akel, Greens, and Elam parties feel left out. They say the process was too fast and not clear. They worry that important checks are being missed. Akel MP Aristos Damianou said some parties did not want to tax wealth. His party wants to tax big bank profits and expensive houses.
The Disy party, usually in opposition, is supporting the government. This is a surprise. It helps the government move forward. The Finance Committee is meeting this week. The changes are moving quickly to meet the deadline.
The vote on December 22 should pass the reform. But the debate shows different ideas about fairness. The government will have less tax money. It has not yet said how it will get more money later. So, these tax changes are important for the economy and politics before the election.