Cyprus tax revenues 2023 reached €7.3 billion, with both direct and indirect taxes recording strong growth, according to the Republic’s audited financial statements for the year, published in August 2025.
Tax receipts remained the main lifeline of state coffers in 2023, exceeding €7 billion. This is confirmed by the 2023 Financial Statements prepared under Article 79 of the Fiscal Responsibility and Budget Framework Law and tabled in Parliament yesterday by the Treasury.
According to the Treasury, the Financial Statements of the Republic of Cyprus for the year 2023 had previously been approved by the Council of Ministers on 6 August 2025, following submission to the Minister of Finance by the Accountant General on 21 July 2025.
Net inflows from operating and investment activities stood at €186 million, down 42% from €320 million in 2022. After servicing public debt amounting to €751 million, the year closed with net outflows of €565 million, an increase of €429 million compared with the previous year.
Taking into account net outflows from loan drawdowns and repayments (€534 million), total outflows in 2023 came to €1.099 billion, up 25% from €878 million in 2022.
Taxes boosted revenues
Total revenue from operating and investment activities rose by 8% to €8.396 billion (2022: €7.751 billion). Tax revenue, as noted, exceeded €7 billion, amounting to €7.3 billion. Indirect taxes accounted for 48% of the total (€4.038 billion), direct taxes for 39% (€3.258 billion), and other revenue for 13% (€1.1 billion).
Direct taxes recorded an increase of 8% or €242 million, mainly due to higher corporate income tax (€1.535 billion) and personal income tax (€974 million).
Indirect taxes rose sharply by 12% or €429 million, primarily due to VAT, which increased by €353 million to €2.92 billion.
Other revenue included €440 million from the provision of services and sale of goods, €177 million from EU grants, €132 million from airport and port management fees, and €23 million from CYTA dividends.
Increase in social benefits
Total operating and investment expenditure rose to €8.210 billion from €7.431 billion in 2022.
The largest expenditure category was transfers, totalling €3.696 billion, up 11%, mainly due to higher social benefits, particularly for the General Healthcare System (GHS), which rose to €762 million from €566 million in 2022.
Social benefits overall reached €1.862 billion, with stable spending on the Guaranteed Minimum Income, child allowance, and grants to low-income pensioners.
Personnel costs increased by 11% to €2.447 billion, with the Ministry of Education accounting for 36%, the Ministry of Health for 13%, and the Ministry of Justice for 13%. Pensions and gratuities amounted to €526 million, up 9%.
Financing activities and debt
Revenue from financing activities stood at €1.219 billion, while expenditure came to €1.753 billion, the largest share of which was the repayment of €1 billion in European medium-term notes. Public debt interest payments surged to €796 million from €498 million in 2022.
Surplus in the new pension scheme
The Special Pension Benefits Payment Fund operated for the first time in 2023, recording revenue of €54.5 million and expenditure of €3.8 million, resulting in a surplus of €50.7 million.
The Financial Statements of the Republic of Cyprus include the results of the entities of the State Budget for the year ending 31 December 2023. Specifically, they include the Accountant General’s report, the Receipts and Payments Account, the State Budget Implementation Statement, and notes to the Financial Statements.
They were prepared in accordance with the International Public Sector Accounting Standard “Financial Reporting under the Cash Basis of Accounting”, under which revenue and expenditure are recognised on the date of receipt or payment.
The 2023 Financial Statements were audited by the Auditor General of the Republic, whose report forms an integral part of the audited Financial Statements, enhancing their credibility.
The full text of the 2023 Financial Statements of the Republic of Cyprus is available on the Treasury’s website at www.treasury.gov.cy under the sections “Sectors / Financial Information / Public Accounts”.
Also read: Report on the Tax Department shows positive signs
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