Cyprus parliament passes legislation impacting social cohesion fund contributions

The Cypriot Parliament has passed a new bill supported by DISY, DIKO, ELAM, DI-PA, and independent member A. Themistocleous. This legislation provides for a retroactive refund of 10 million euros to shipping companies that had previously contributed to the Social Cohesion Fund. Additionally, the law abolishes the obligation for these companies to pay future contributions to this fund, resulting in an annual loss of approximately 600,000 to 800,000 euros for the state. The AKEL party has strongly opposed this decision, labeling it as a misuse of funds originally intended for social policy. AKEL claims that the legislation was approved despite objections raised by the Ministry of Labor, the Law Office, the Director of Social Insurance, and the Commissioner for State Aid. The opposition party further argues that this move contradicts the government's stated commitment to fiscal stability. No official rebuttal from the sponsoring parties was provided in the source texts beyond the details of the vote. The legislation marks a significant shift in corporate taxation regarding social contribution funds in Cyprus.