Insider Economy 2020 to bring additional tax breaks

2020 to bring additional tax breaks

2020’s annual state budget includes additional tax exemptions, Finance Minister Harris Georgiades yesterday told executive committee members of right-wing SEK union.

Specifically, the following measures will be effective as of next year:

—Tax exemption for employees and retirees will rise to 1/5 of their income. Today, the tax deduction for contributions to pension funds is 1/6 of their income. Increasing the tax exemption to 1/5 is not irrelevant to the recent implementation of the first phase of the country’s General Health Plan (Gesy). This was made possible because many citizens will abolish private health insurance, for which they were taxed on their income, as from June 2020 when Gesy is fully implemented. Taxes are now calculated on taxpayers’ contributions to various funds, Gesy, life insurance premiums and social security.

—Payroll upgrades for 1000 low-salary employees in the public and wider public sector. These are office assistants who, somehow, were stuck at A1, 2 and 5 salary scales. They are now upgraded to A2, 5 and 7 salary scales. These employees were hired on a temporary employment period regime which was later turned into an indefinite one but at lower salary scales. The budgetary cost to the government from this is not expected to be high.

— The issue of prominent funds for new entrants into the public and wider public sector is expected to also be resolved. These new public servants were not part of any pension scheme since 2011. The dialogue on this thorny issue is expected to be completed in the coming weeks. And funds to be conributed will be retroactive.

—Continuation of the operation of Employees Health Funds, which are complementary to Gesy, at semi-governmental organisations and municipalities. The operation of these Funds will be for an indefinite period and will cover services provided by Gesy.

Read more:

https://in-cyprus.com/finmin-unveils13-point-reform-agenda-as-2019-budget-debate-gets-underway/

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