The Turkish-occupied areas of Cyprus reported a steep rise in fiscal income, with “tax revenues” increasing by almost 57% in the first half of 2025 compared with the same period last year.
According to figures published by the unrecognised “ministry of finance,” “tax revenues” between January and June 2024 stood at 19.46 billion Turkish lira. For the same period in 2025, they surged by 56.85% to reach 30.53 billion lira.
Turkish Cypriot media noted that 72.2% of local revenue in the first six months derived from “tax revenues,” with the breakaway administration continuing to rely heavily on these collections to cover budget deficits.
Inflation and rising costs
The growth rate of both “tax” and overall revenues outpaced the official annual inflation figure of 35.78%, as announced by the “statistics office” for June 2024-June 2025.
Direct “tax” revenues rose by 73.89%- more than double the inflation rate- from 8.7 billion to 15.2 billion lira. Indirect “tax” revenues climbed 42.9%, from 10.86 billion to 15.5 billion lira.
The most striking increase was seen in VAT, which doubled compared with last year. VAT receipts in the domestic market rose from 1.87 billion to 3.74 billion lira, reflecting sharp price hikes in goods and services.
Income “tax” revenues increased by more than 80%, while corporate “tax” revenues rose by over 66%.
Minimum wage effect
The minimum wage introduced on 1 July- set at 51,202 lira gross and 44,546 lira net- has also pushed up many “state” fees, duties and fines. Fiscal charges linked to the minimum wage rose by 17.79%, in line with salary increases.
These adjustments are expected to further boost “tax revenues” in the occupied areas during the second half of the year.
Also read: Cyprus tax revenues hit €7.3 billion in 2023
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