Cyprus saw total tax revenues increase by 5.9% to approximately €3.1 billion in the first five months of 2026, compared to €2.92 billion in the same period last year. This growth reflects the impact of a comprehensive tax reform introduced on January 1, aimed at easing tax burdens for middle-class earners and boosting taxpayer disposable income.

Personal income tax revenue, however, declined by 2%, dropping to €497.8 million due to new allowances and a raised tax-free threshold of €22,000. Stamp duty collections fell sharply by 71.6% following its abolition under the reform. Other taxes such as casino tax and import VAT also decreased, though these declines were not directly linked to the reform.

The new tax framework introduced wider structural changes, including a rise in corporate tax rate to 15%, lower dividend withholding tax, and enhanced incentives for research and development. It also implemented mandatory electronic payments for rental income and strengthened tax collection measures, aiming to improve Cyprus's market competitiveness and tax fairness.