The Cabinet on Wednesday announced its decision to slash taxation on interest income from 30% to 17%, Finance Minister Makis Keravnos.
Speaking after the Cabinet meeting, Keravnos said the impact of the measure is estimated at €16 million, noting that it aims to increase income from deposits held by mainly medium-sized households and enterprises.
He added that banks should follow suit in boosting income for depositors.
“At a time when deposit rates remain compressed, we send a message for the increase of the depositors’ disposable income and I hope that the government paves the way and others will follow suit,” he said.
Cyprus doubled the taxation on interest income to 30% during the 2013 financial crisis to boost public revenue.