Toros: Nearly 80 Per Cent Of The Budget Is Spent On Public Sector Salaries

Speaking on Sabah Postası, a programme prepared and presented by Gökhan Altıner on Kıbrıs Postası TV, Toros first evaluated the ongoing budget discussions.

He said that salaries paid to public sector employees and pensioners, made up of current expenditures and transfers, constitute almost 80 per cent of the budget. Toros noted that this situation has persisted for years, resulting in a budget almost entirely allocated to wage payments and leaving the state with no funds for investment.

Toros pointed out that while reducing expenditures is extremely difficult in inflationary economies, increasing revenues remains possible. In this context, he said legal regulations should be introduced for cryptocurrency, online betting and forex transactions. He argued that a properly regulated economy and effective taxation could both increase revenues and represent a significant step in combating money laundering, noting that these issues are already included in government programmes.

Using the phrase “clean money fears dirty money,” Toros said that illicit funds dominate in Northern Cyprus, making comprehensive tax reform unavoidable. He stated that shortcomings in the current system prevent an increase in public revenues, turning the issue into a serious structural problem.

Toros identified the lack of state resources for investment as the first chronic structural problem in Northern Cyprus, while the second is the budget deficit caused by revenues failing to cover expenditures. He said the anticipated financial support from Turkey had not been secured, leading to borrowing exceeding TL 14 billion and creating a serious imbalance between income and spending.

He added that fluctuations in the Turkish lira and high inflation have further worsened the situation, warning that borrowing would spill over into the next year and that debt would be used to service existing debt. For this reason, he said, revenue-enhancing reforms must be implemented urgently.

Concluding his assessment, Toros warned that without immediate measures in 2026, the problems would deepen. He said the main objective should be to tax informal economic activities that fall outside existing legal frameworks, in line with the principle of “taking less from those who earn less and more from those who earn more.”