The Federation of Employers and Industrialists warns that imposing extra taxes on banks threatens Cyprus’s investment credibility and could impact the economy negatively.
The Federation of Employers and Industrialists (OEB) has expressed serious concern regarding the renewed debate on imposing additional taxes on bank profits, beyond the existing special fee since 2011. These taxes are inaccurately described as unexpected.
During the 2011-2014 financial crisis, international investors showed trust and supported the banking sector with billions, despite no immediate returns. Their confidence was based on the stability of Cyprus’s legal and tax framework, and they achieved profitability after years of losses through cost-cutting, technological advancements, and staff reductions of over 50%.
OEB considers it unthinkable that a sector which has stabilized and become profitable should be penalized. Such measures could undermine investor trust in Cyprus, as future taxes could be applied to other sectors or economic activities.
The proposed interventions may also be unconstitutional and contradict recommendations from the International Monetary Fund and the European Financial Stability Mechanism. They could negatively affect the credit rating of both the banking sector and the overall economy.
OEB urges political forces to abandon initiatives that could harm economic stability. From 2017 to 2024, banks paid a total of €755 million in corporate taxes and special taxes on deposits. The government can utilize part of these funds for social solidarity without adverse effects.
