Cyprus: the composition of government revenues, 2002-2008

Author (Corporate)
Series Title
Series Details Vol.6, No.5, July 2009
Publication Date July 2009
ISSN 1725-8375
Content Type

Between 2002 and 2008 the Cypriot economy grew at an annual average rate of about 3½% in real terms, significantly above the euro area. In parallel, total tax receipts increased on average at 11% per year, leading to an average annual
elasticity with respect to GDP of about 1½. This increase in tax revenues has contributed significantly to the improvement of the Cypriot budget balance.

This Country Focus shows that a large part of the increases in tax revenues is structural, being the result of tax harmonisation measures adopted in the run-up to EU
accession. However, the developments which led to the remarkable revenue performance in 2007 are likely to be of a more temporary nature, linked to short lived asset boom. This calls for maintaining fiscal prudence, especially in the light of the high external imbalance.

Source Link Link to Main Source http://ec.europa.eu/economy_finance/publications/publication15495_en.pdf
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