The Cyprus government is preparing additional measures to ease the rising cost of living, while maintaining that it is already using every available policy tool without endangering public finances or breaching European obligations.
Daily Monitoring Of Household Pressure
The Finance Ministry said on Monday that it is reviewing geopolitical developments and their impact on households on a daily basis. It added that a range of support measures, particularly for vulnerable groups, remains in force.
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Those measures include zero VAT on several basic goods, among them fresh fruit and vegetables, meat, poultry, fish, baby milk, children’s and adult nappies, and feminine hygiene products.
Targeted Tax Relief Remains In Place
The ministry also pointed to the reduced 5 per cent VAT rate on electricity, which it said applies to around 33,000 low-income households and single-parent families.
In addition, the government has cut excise duty on motor fuels by 8.33 cents per litre, while child benefit has been increased and the income thresholds for eligibility have been widened.
Officials said the package is being reinforced by wider tax reform measures, including an increase in the tax-free income threshold to €22,000 and additional deductions for workers and households.
Fiscal Headroom As The Basis For Support
According to the ministry, these measures reflect the redistribution of gains created by what it described as responsible economic policy, fiscal surpluses and lower public debt.
The government said further initiatives are already being prepared for submission to the Council of Ministers. Finance Minister Makis Keravnos said earlier on Monday that a new package aimed at easing the cost of living would be brought before cabinet.
Government Rejects Claims Of Inaction
Responding to criticism of the government’s handling of inflation and household pressure, the ministry said protests were a democratic right.
It added, however, that the administration “is not remaining passive” and is “doing everything it can to respond,” while staying within the constraints of sound public finances and Cyprus’ European commitments.
