Cyprus: VAT abolition for six months and price cuts for 1,700 products

Food and personal hygiene products (essentials) in Cyprus will fall in price for six months. This is the decision taken by the country’s authorities to stimulate the consumer market.

Last week in Cyprus, consumer prices for more than 1700 products. This is due to the government’s decision to abolish VAT on a wide range of food products such as bread, milk, eggs, and personal care products.

Cypriot Finance Minister Makis Keravnos told euronews that this temporary measure, scheduled for six months, could be extended if necessary:

“In an effort to alleviate the plight of households, especially the most vulnerable, we have decided to zero VAT on a number of basic consumer goods. Our decision is designed for 6 months, and we expect that during this period there will be a decrease in inflation and, consequently, a decrease in prices. In six months, we will re-evaluate the situation to decide whether there is a need to extend this measure.The idea is to gradually achieve the goal: we hope that by the end of the year there will be a decrease in inflation.”

Recall that inflation in Cyprus in April fell to 3.8% year on year, but consumer prices for many goods – mainly food – remain high.

The Ministry of Finance is working to create mobile application that will allow consumers to monitor prices in various supermarkets in real time and choose the most accessible place for shopping.