Cabinet to meet to discuss cost of living measures

Cabinet is set to hold an extraordinary meeting on Thursday with the aim of discussing and approving a new package of measures to alleviate the cost-of-living crisis.

The meeting comes in light of the forthcoming expiry of the fuel tax subsidy, which Finance Minister Keravnos confirmed on Tuesday would not be extended past its planned expiry date of next Monday.

However, according to the Cyprus News Agency (CNA), the government is considering extending the electricity subsidy until the end of June. The subsidy was extended in February until April 30, having first been introduced in October.

At the time of its introduction, the subsidy was worth around €70 per bimonthly bill for average consumers, but reductions in the price of oil since then have blunted the value of the subsidy to around a €14 reduction for the average consumer.

In addition to the electricity subsidy, the government is also reportedly considering extending the scrapping of VAT on basic products until the end of June.

The government’s announcement in February extended the zeroing of VAT through the end of May, with Makis Keravnos having said earlier this month that it has had “significant benefits for consumers.”

The current list of zero-VAT products includes meat, fish, and vegetables, as well as bread, milk, eggs, baby food and nappies, feminine hygiene products, and adult incontinence underwear.

“The average benefit to consumers from the application of zero VAT on the products covered by the measure amounts to approximately €7.50 on purchases totalling €95, or eight per cent,” Keravnos said earlier this month.

The government is also reportedly considering extending various social welfare measures taken in February, which at the time included a set of financial benefits for vulnerable members of society, including single-parent families and internally displaced persons.