Wealth inequality is widening in Cyprus, with the richest households holding an even larger share of the country’s wealth, according to a newly published European Commission study on wealth taxation. The study was published this month by the EU Publications Office and the Commission’s tax department.
According to the study, the richest 10% of households in Cyprus now hold 67% of total national wealth, one of the biggest increases in wealth concentration recorded in the European Union.
The report says that in southern European countries such as Cyprus, the richest 10% held 67% of total wealth in 2023, up 13 percentage points from 2007.
In Greece, the richest 10% held 61% of total national wealth in 2023, up 11 percentage points from 2007.
For other countries that recorded increases, the report lists Slovenia at 57.2%, up 9.2 percentage points, Malta at 53.6%, up 9.4 points, Portugal at 60.2%, up 1.2 points, Spain at 57.2%, up 1.1 points, and Italy at 56.1%, up 1 point.
The study says most central and eastern EU member states recorded increases in the wealth share of the richest 10% of households, while several countries in northern and western Europe recorded declines or little change. It notes Sweden as a notable exception, with an increase of 7.2 percentage points since 2007.
Potential revenue
The Commission study also sets out estimates of potential revenues from a coordinated European wealth tax based on the model associated with French economist Gabriel Zucman.
The proposal, which was discussed at G20 level under Brazil’s presidency, provides for an annual 2% tax on the net wealth of individuals with assets above €100 million.
Zucman estimates that such a minimum tax could raise more than $200 billion a year globally, while the report says the proposal has become a starting point for wider discussion on the feasibility and design of such a tax.
A table in the report headed “Estimated revenue from an EU-wide net wealth tax on UHNWIs” sets out potential revenues by member state.
According to the estimates, Cyprus could raise €1.2 billion a year under a 2% rate, including €800 million from billionaires. Under a 3% rate, the estimated total rises to €2.1 billion, of which €1.2 billion would come from billionaires.
For Greece, the estimates put potential annual revenue at €1 billion under a 2% rate, including €700 million from billionaires. Under a 3% rate, the total would rise to €1.9 billion.
The report puts the equivalent figures for France at €19.4 billion and €34.8 billion, for Germany at €16.9 billion and €30.4 billion, and for Italy at €8.3 billion and €15 billion.
AKEL reaction
Commenting on the Commission study, AKEL said the findings confirmed what it described as the growing concentration of wealth in the hands of a few.
“The EU report on wealth taxation confirms the constantly increasing concentration of wealth in the hands of the few. In Cyprus, the picture is even more intense, as the richest 10% recorded one of the biggest increases in wealth concentration in the EU, now holding 67% of total wealth,” the party said.
It added that while the government “boasts about surpluses and positive indicators”, it ignores what it described as the reality facing the majority of society, with income and social inequalities intensifying while wealth accumulates among the few.
AKEL said this was “not accidental” but a structural problem in the Cypriot economy, which it said had been reinforced by the policies of the Anastasiades-DISY and Christodoulides governments.
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