Cyprus maintained a positive fiscal position during the first five months of 2026, as increased tax income, particularly from VAT, helped offset higher government expenditure.
Preliminary fiscal data prepared by the Statistical Service for the period January–May 2026 showed a General Government surplus of €552.9 million, equivalent to 1.4% of GDP, compared with a surplus of €544.5 million or 1.5% of GDP during the same period in 2025.
Total revenue during January–May 2026 increased by €282.5 million, or 4.8%, reaching €6.21 billion compared with €5.92 billion during the corresponding period last year.
VAT records strongest increase
Revenue from income and wealth taxes rose by €115.2 million, an increase of 8.4%, reaching €1.49 billion compared with €1.37 billion in 2025.
Social contributions increased by €102.2 million, or 5.2%, to €2.07 billion compared with €1.96 billion in the previous year.
Total taxes on production and imports increased by €93.1 million, or 4.9%, to €2 billion.
The largest increase was recorded in net VAT revenue, after deductions for refunds, which rose by €138 million or 11%, reaching €1.39 billion compared with €1.25 billion in 2025.
Capital transfers increased by €26.4 million to €38.8 million, while income from services rose by €9.4 million to €433.2 million.
Meanwhile, interest and dividend income fell by €24.2 million, down 26.1%, to €68.5 million, while current transfers dropped by €39.6 million, or 25.5%, to €115.7 million.
Government spending also increased
Total expenditure during January–May 2026 increased by €274.1 million, or 5.1%, reaching €5.65 billion compared with €5.38 billion during the same period in 2025.
Intermediate consumption increased by €52 million to €590.3 million, while staff compensation, including social contributions and pensions for public employees, rose by €47.6 million to €1.64 billion.
Social benefits recorded the largest increase among expenditure categories, rising by €108.2 million, or 4.9%, to €2.31 billion.
Interest payments also increased by €32.3 million, reaching €238.4 million, while current transfers rose by €70.5 million to €429.3 million.
Capital investment declines
The capital account fell by €26.8 million, decreasing by 6% to €418.7 million.
Fixed capital investments declined by €25.4 million to €327.7 million, while other capital transfers fell slightly by €1.5 million to €90.9 million.
Subsidies also dropped by €9.6 million, or 23.2%, reaching €31.8 million.
The Statistical Service noted that estimates were used for a number of General Government entities, particularly within the Local Government sector, due to insufficient data submissions from the relevant authorities.
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