In 2024, the share of taxes in the country’s GDP reached 37.6%. That year, citizens and companies across the European Union paid more taxes and social contributions than the year before. According to Eurostat, the total amount of taxes and social contributions rose to 40.4% of the EU’s GDP, compared to 39.9% in 2023. In the eurozone, the increase was similar—from 40.5% to 40.9% of GDP.
The total tax revenue in the EU increased by €387 billion in 2024, reaching €7.281 trillion. This marks the largest rise in recent years, despite slower economic growth in several countries.
Cyprus’s position in the EU ranking
Cyprus recorded a notable rise in its tax burden—from 35.9% of GDP in 2023 to 37.6% in 2024. This is higher than in 2015 (35.7%) and significantly higher than in 2005 (33.5%). Thirty years ago, in 1995, Cyprus’s tax burden was only 26.7% of GDP.
According to the data, Cyprus ranks 14th among the 27 EU member states in terms of tax collection levels. For comparison, the highest rates were recorded in Denmark (45.8%), France (45.3%), and Belgium (45.1%), while the lowest were in Ireland (22.4%), Romania (28.8%), and Malta (29.3%).
The growth of tax revenues in Cyprus is partly due to changes in VAT, excise duties, and property taxation. In addition, the authorities have been actively implementing digital control tools, which improve tax collection efficiency.
Impact of the pandemic and economic crises
Eurostat notes that the COVID-19 pandemic had a significant impact on the structure of tax revenues. In 2020, almost all EU countries introduced tax payment deferrals, which temporarily reduced revenues but led to increased public debt.
In the following years—2021 and 2022—many states maintained relief measures, cut taxes on energy resources, and provided business support. However, starting in 2023, amid economic recovery and rising inflation, tax revenues increased sharply.
As of 2024, taxes accounted for 87.8% of all EU government revenues, reflecting steady economic recovery. In Cyprus, this figure has also been growing, driven by stable employment, rising wages, and the active development of the tourism and IT sectors.
Global economic trends and their impact on Cyprus
In 2025, the global economy continues to experience uncertainty. In the United States, the Federal Reserve has cut the key interest rate for the second time, stimulating investment growth—especially in artificial intelligence. This indirectly affects Europe, where stock markets and investment flows are reviving.
Amid tensions between the US and China, the two sides recently announced a one-year truce in their trade war, stabilizing prices for raw materials and rare-earth metals. This creates favorable conditions for Cyprus, which is actively strengthening its role as a financial and technological hub in the Eastern Mediterranean.
Experts predict that in 2026, the profits of European companies will grow by 13.4%, while on Wall Street they are expected to rise by 12%. For Cyprus, this may mean greater interest in offshore investments and a strengthening of its financial services sector.
Prospects for Cyprus
The growth in tax revenues opens new opportunities for financing infrastructure and social projects on the island. The Cypriot government plans to direct part of the additional income toward supporting green energy, developing housing programs for young families, and digitizing the public sector.
Economists note that if the current course is maintained, the country can successfully balance tax revenue growth with business incentives. In the long term, Cyprus could become an example for other EU countries, demonstrating how to combine financial stability with sustainable growth.