AKEL and the Greens tore into DISY on Wednesday, accusing the main opposition party of cutting a backroom deal with the government on €110 million in tax relief whilst sidelining critics who want to tax the wealthy.
The row erupted over a Tuesday meeting in Finance Minister Makis Keravnos’s office where DISY and governing parties DIKO and DIPA hammered out changes to the tax-free threshold, deductions for children and students, housing loan interest relief and rent allowances. The party alliance plans to table the agreement as an amendment.
Wednesday’s Finance Committee session was held behind closed doors due to fierce reactions. The committee split in two, with AKEL and Greens MPs voicing sharp complaints about being frozen out by the DISY-DIKO-DIPA-EDEK alliance. Heated exchanges erupted between AKEL and DISY MPs, with the former accusing the latter of now supporting the government.
AKEL MP Aristos Damianou called the party alliance’s meeting with Keravnos a manipulation, arguing that some are backing the few at the expense of the many. He said DISY and DIKO are seeking to prevent wealth taxation.
Greens leader Stavros Papadouris did not hide his displeasure about Tuesday’s meeting.
DISY MP Onoufrios Koulla hit back hard, saying they would not ask anyone whom they meet with, adding they went to the Finance Ministry after an invitation from DIKO. He rejected AKEL’s criticism of an anti-institutional meeting, stressing they would not explain themselves to anyone.
DIKO Finance Committee chair Christiana Erotokritou said they rightly and dutifully met the Finance Minister, stressing parties have an obligation to maintain contact with the government side to avoid surprises. She rejected talk of manipulation, emphasising everything was done publicly.
The Finance Ministry does not believe additional taxes are needed to cover the €110 million cost, according to party officials who attended the meeting. The ministry pointed to state cushions created by surplus revenue from increased tax receipts and strong economic performance.
What the deal includes
The package breaks down as follows: €45 million from raising the tax-free threshold to €22,000, up from the government’s proposed €20,500. Another €15 million comes from scaled child and student deductions—€1,000 for one child or student (up to age 24 for males, 23 for females), €1,250 for two, and €1,500 for three or more. A further €15 million covers €2,000 deductions for housing loan interest and rent.
The deal also includes €15 million from adjusted tax brackets: 20% on income from €22,001 to €32,000; 25% from €32,001 to €42,000; 30% from €42,001 to €72,000; and 35% above €72,001. The final €20 million comes from abolishing the stamp duty law.
Income thresholds for additional allowances also rise based on family composition: €90,000 for one child, €100,000 for two, €150,000 for three or four, and €200,000 for five or more.
DISY’s Koulla estimated €35 million would return to the state through increased consumption. Representatives from the four parties believe the fiscal cost will be covered this way.
Opposition plans counter-attack
AKEL, ELAM and the Greens are preparing amendments that lack majority support given the DISY-DIKO-DIPA-EDEK alliance.
AKEL plans to push proposals for property tax on assets worth over €3 million, windfall taxes on banks and renewable energy companies, 5% VAT on electricity and renovations, and zero VAT on food. The party also wants a €22,500 tax-free threshold, higher income criteria and child deductions, and protection for pension fund investments from taxation.
ELAM MP Sotiris Ioannou said his party had from the outset stressed the need to raise the tax-free threshold, income criteria and tax deductions. ELAM plans further family support amendments.
The Greens prepared amendments for higher capital gains tax relief: €30,000 exemption for home sales instead of the proposed €20,000, €50,000 for agricultural plots instead of €30,000, and €150,000 for primary residences instead of €100,000. They also want bank deposits allowed for electronic rent payments for tax purposes, revised tax brackets with 30% on income between €40,000 and €70,000 and 35% above €70,000, and child deductions of €1,500 for everyone and €3,000 for single parents.
DIPA MP Alekos Tryfonides said their amendments would create fairer distribution of the tax burden and support low earners and the middle class. EDEK participated in Tuesday’s meeting via video call and issued a statement expressing satisfaction with the agreement.
The Finance Committee reviewed revised government bills on Wednesday incorporating changes agreed during parliamentary discussions, including added and removed provisions and rewording of various articles.
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