The much-anticipated green taxes, particularly crucial for Cyprus, have been postponed from their initial May implementation date, according to the Ministry of Finance’s General Director, Andreas Zachariades. Specifically, the carbon tax on fuels will be delayed till summer, while the overnight stay levy is rescheduled to late 2026, partly detached from the Recovery and Resilience Plan.

Carbon Tax: Summer Implementation Expected

Although slated for May, the carbon tax bill on fuels is pending parliamentary submission. Zachariades highlighted the inevitable nature of this tax due to European Union regulations, with changes expected within the next few months. The initial rate, approximately 6 cents per liter, will rise by 2026 in alignment with the EU’s ETS2 system.

Follow THE FUTURE on LinkedIn, Facebook, Instagram, X and Telegram

Expected Revenue And Compensatory Measures

Forecasted to generate €70 million over 18 months, this tax will inevitably increase the financial burden. However, compensatory measures, including subsidies for vulnerable groups and vehicle replacement schemes, are under consideration for equitable tax impact distribution.

Levy On Overnight Stays: An Industry Perspective

The proposed €2.50 levy affecting the hotel industry is being reconsidered for late 2026. Unlike the carbon tax, this levy isn’t bound to EU commitments, allowing for flexible timing. Considered jointly with hospitality stakeholders, this tax intends to support financial sustainability while promising compensatory hospitality sector initiatives.