Proposed legislation aimed at addressing the long-standing shortcomings in Cyprus’ municipal waste management system through the introduction of a landfill tax is currently under discussion in the Parliamentary Environment Committee and must be approved by the House of Representatives before its summer recess.
The measure forms part of the country’s green tax reform and its commitments under the National Recovery and Resilience Plan, with a completion milestone set for 30 June 2026.
The obligation was undertaken by the government in 2021 as part of the green tax reform package in order to secure more than €1 billion in funding from the European Commission. If the relevant regulations introducing a tax on the final disposal of municipal waste in landfill sites, as well as related offences and penalties, are not approved by 31 August, Cyprus stands to lose €23 million in funding.
There is no obligation to harmonise with European legislation on the matter.
Tax to start at €10 per tonne
The Ministry of Finance has been tasked with shaping the final framework of the green tax reform, which includes a series of environmental taxes.
Regarding waste management, authorities have opted for a landfill tax due to Cyprus’ high reliance on landfill disposal and the need to meet the European target of reducing municipal waste sent to landfill to 10 per cent by 2035.
According to the Department of Environment, 68 per cent of household waste in Cyprus currently ends up in landfill sites.
The introduction of the landfill tax alone would unlock €23 million through the Recovery and Resilience Mechanism. This amount would be added to the €25 million already earmarked under the THALIA Cohesion Policy Programme for source separation and separate waste collection schemes implemented by local authorities.
As a result, a total of €48 million could become available to support local authorities in implementing the Pay As You Throw (PAYT) system.
How much will the tax cost?
Revenue generated by the landfill tax will be allocated to the Department of Environment’s budget and may be used to subsidise waste collection costs, support recycling and organic waste collection, and fund projects and initiatives aimed at improving waste management by local authorities.
The tax will be introduced gradually, starting at €10 per tonne of waste and increasing by €5 annually until it reaches €70 per tonne by 2039.
The rates will be as follows:
- Up to 31 December 2027: €10 per tonne
- 2028: €15 per tonne
- 2029: €20 per tonne
- 2030: €25 per tonne
- 2031: €30 per tonne
- 2032: €35 per tonne
- 2033: €40 per tonne
- 2034: €45 per tonne
- 2035: €50 per tonne
- 2036: €55 per tonne
- 2037: €60 per tonne
- 2038: €65 per tonne
- 2039 onwards: €70 per tonne
Authorities expect the amount of waste sent to landfill to decline significantly from 2030 onwards due to the expansion of source separation and separate collection programmes. Consequently, despite the gradual increase in the tax rate, the overall financial burden is expected to remain proportionally lower as landfill volumes decrease.
Municipalities and communities oppose the plan
The proposed regulations have triggered concern and opposition from municipalities and communities, mainly due to the expected costs and the belief that essential infrastructure should be put in place before the tax comes into force.
Representatives of both the Union of Municipalities and the Union of Communities argue that the state should first implement the necessary infrastructure and policies to substantially reduce the volume of waste being sent to landfill before introducing additional taxation.
Municipal authorities also contend that past policy failures and the lack of timely planning have led to penalties against the Republic of Cyprus and that the cost of those shortcomings is now being transferred to households.
Under the proposed framework, local authorities will pay the landfill tax to landfill operators, who will then transfer the proceeds to the Department of Environment. The revenue will be used as compensatory funding for investments, subsidies, grants and activities that promote sustainable municipal waste management and the transition to a circular economy.
Cyprus remains among the European Union member states with one of the highest per capita rates of waste generation and one of the highest percentages of municipal waste disposed of in landfill sites, leaving the country far from the European target of reducing landfill disposal to below 10 per cent by 2035.
Source: Angelos Nikolaou- Philenews
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