Cyprus Business Now
The University of Cyprus’ Economics Research Centre (CypERC) is entering the second phase of its tax reform project, it emerged on Monday, after it had been tasked to come up with a series of proposals by the government.
The proposed tax reform is set to focus on green taxation, reducing dependence on expensive electricity, and offering tax incentives to businesses, while at the same time considering the impact on state finances.
The centre is expected to present its progress and findings by the end of September at the Finance Ministry, with all relevant stakeholders in attendance.
Before this presentation takes place, a meeting is scheduled to take place between the CypERC team, the Finance Ministry, and President Nikos Christodoulides to discuss the key points, according to a report by local outlet Stockwatch on Monday.
The centre has already conducted numerous exercises to assess the impact of green taxes on households and businesses, particularly regarding fuel, water, and waste.
The goal is to develop counterbalancing measures that consider the burden on public finances, ensuring that the tax reforms remain fiscally neutral.
These bonds, held through the Public Sector Purchase Programme (PSPP) and the Pandemic Emergency Purchase Programme (PEPP), represent 28 per cent of the Republic of Cyprus’ issued debt.
As of mid-August, the balance of Cypriot bonds in the PSPP portfolio stood at €3.99 billion, marking a €304 million decrease due to the maturity of Cypriot bonds in June.
In addition, the weighted average maturity of these bonds on the Eurosystem’s balance sheet was 8.02 years.
The ECB originally announced in August 2023 that it would cease reinvesting amounts from maturing bonds as part of its balance sheet reduction strategy, thereby reducing market liquidity to support broader efforts to curb inflation.
The broader Asset Purchase Programme (APP), of which the PSPP is a part, stood at €2.8 trillion at the end of July, reflecting a €33 billion reduction.
The largest decrease was recorded in the PSPP, which saw a €26.7 billion drop, bringing its total to €2.22 trillion, the highest among the programmes.
The company reported that office prices continue to rise, despite an increase in supply, following a significant low in early 2022 with rents now approximately 14 per cent higher.
This sustained demand has led to a notable increase in office rental rates, which have risen nationally by 8.5 per cent in the first quarter of 2024, compared to the same period in 2023, marking a 10 per cent rise since 2019.
Leading the charge, Limassol now sees rents ranging from €25 to €50 per square metre, a climb from the previous €20 to €45.
Additionally, rental prices in Larnaca have nearly doubled to €15-€20 per sqm, up from last year’s €8-€12.
Nicosia is witnessing similar trends, with rents increasing to €15-€30 per sqm from €12-€23 last year.
What is more, both Famagusta and Paphos have seen substantial rent hikes, indicative of a broader nationwide trend—with Famagusta rents climbing from €5-€12 per sqm to €10-€15 per sqm in 2024, and Paphos rents rising to €10-€15 per sqm from €7-€10.
While the purchase prices for office spaces have largely remained stable in early 2024, there have been noticeable increases in areas like Larnaca and Famagusta.
The event will spotlight the region’s most promising startups, culminating in a chance for the winning team to compete at the Grand Finale in San Francisco.
The Startup World Cup is a prestigious global event that brings together innovative startups from around the world to pitch their ideas to leading investors, venture capitalists, and corporate leaders.
The stakes are high, with the Cyprus winner securing a spot in the San Francisco finale, where they will vie for a $1,000,000 investment and valuable networking opportunities.
On August 29, the event will kick off with a gathering of guests at 18:30, followed by a welcome speech from Pegasus Tech Ventures and Cypriot organisers at 19:00.
The evening will feature a series of panel discussions and keynote speeches addressing key topics such as ‘Made in Cyprus: How to Make Cyprus a Leader in the Startup Ecosystem‘ and ‘Empowering Women Entrepreneurs: The Startup Experience‘.
Highlights include a panel discussion moderated by Martin Zarian, Co-founder of Factory 39 and Balabook, and an interview with Kos Stiskin, Co-founder and Chairman of Finom.
According to the Cyprus News Agency (CNA), the EAC had said the EMA’s announcement had “violated an agreement reached by the two sides which had referred to ‘a termination of announcements and the holding of a meeting to discuss both sides’ concerns’.”
The EMA had on Friday called for the “immediate opening of a competitive electricity market” and the creation of a regulatory framework in the sector which would “promote competition to ensure a more stable, healthy, and sustainable future for the energy sector in Cyprus”.
“A competitive electricity market is the answer to all the distortions created by the continuation and extension of the transitional regulation of the market as it stands; distortions which favour the EAC at the expense of private entities participating in the market,” they said.
While the EAC faces criticism for stifling competition, private companies are also accused of profiting excessively from renewable energy without integrating into the national grid.
Analysts suggest that both sides share responsibility for the high electricity prices, with the EAC’s inefficiency and private firms’ untaxed profits contributing to the problem.
The debate underscores the need for a fully liberalised electricity market in Cyprus, along with competitive bidding for new renewable energy projects.
Questioned by Politis Radio over tour operator Tui’s denial of reports that it had struck a deal with the Republic of Cyprus to stop providing day trips for its holidaymakers in Cyprus to the north, he insisted that the government “had the right” to “demand better benefits” for the Republic’s tourism sector when signing contracts with tour operators.
“Do I not have the right, when I have across the table from me an organisation which promotes images saying ‘Discover Kyrenia’ on its website, and thus indirectly promotes the occupied areas as a destination, to ask them to remove it so we can proceed with a cooperation agreement?” he asked.
With this in mind, he expressed concern that the flow of tourists crossing to and from the north at the crossing points is “increasing year on year” and added that “our problem is the unfair competition” provided by the north.
Questioned directly on the matter of Tui’s day trips to the north, he said “we never announced anything”.
“You know the facts. Tui sent an email to Turkish Cypriot stakeholders, and a few days later, after a few reactions from the Turkish Cypriot side, they replied in another email, leaving question marks,” he added.
Speaking to the Cyprus News Agency (CNA), Grigoriou added that a decree issued last year set the start of the carob harvesting and storage period from August 15 onwards, as carobs are not fully ripe before this date.
However, he did not rule out the possibility that this year’s heatwave may have caused the carobs to ripen earlier.
“If harvested while unripe, the carobs will deteriorate during the winter and will not be suitable for either human consumption or animal feed,” Grigoriou explained.
Regarding this year’s production, he said that because the harvest is still in progress, a clear picture of the total yield is not yet available.
“A more accurate assessment will be possible by the end of September, once the harvest is completed,” he added.
The Cyprus Stock Exchange (CSE) ended Monday, August 26 with profits.
The general Cyprus Stock Market Index was at 181.20 points at 12:41 during the day, reflecting an increase of 1.07 per cent over the previous day of trading.
The FTSE / CySE 20 Index was at 110.35 points, representing a rise of 1.06 per cent.
The total value of transactions came up to €122,251, until the aforementioned time during trading.
In terms of the sub-indexes, the main, alternative and hotel indexes rose by 1.24 per cent, 0.1 per cent and 0.27 per cent respectively. The investment firm index remained stable.
The biggest investment interest was attracted by the Bank of Cyprus (+0.64 per cent), Hellenic Bank (+2.94 per cent), Atlantic Insurance (no change), the Cyprus Cement Company (+0.65 per cent), and Lordos Hotels (-3.66 per cent).