Cyprus government prepares further cost-of-living measures

Nicosia, Cyprus. The government is preparing further measures to address the rising cost of living, while saying it is using the options available without putting public finances or Cyprus’ European obligations at risk. The Finance Ministry said on Monday that it assesses geopolitical developments and their impact on households daily.

Measures in force

The ministry said measures aimed particularly at vulnerable groups include zero VAT on fresh fruit and vegetables, meat, poultry and fish, baby milk, nappies for children and adults, and feminine hygiene products.

A reduced VAT rate of 5 per cent on electricity applies to around 33,000 low-income households and single-parent families, according to the ministry. The government has also cut excise duty on motor fuels by 8.33 cents per litre, increased child benefit and widened its income thresholds.

The ministry also cited tax reform that raised the tax-free income threshold to €22,000 and introduced additional deductions for workers and households. It said responsible economic policy, fiscal surpluses and lower public debt had allowed those benefits to be passed on to society.

Further package planned

The ministry said further measures are being prepared for submission to the Council of Ministers. Finance Minister Makis Keravnos said earlier on Monday that a new cost-of-living package would be brought before cabinet.

Addressing criticism of the government’s response, the ministry said protests were a democratic right. It said the government “is not remaining passive” and was “doing everything it can to respond”, within the limits of sound public finances and Cyprus’ European commitments.