Phidias Panayiotou promises hunger strike outside the Presidential Palace if electricity VAT rises to 19%

MEP and leader of Cyprus’s Direct Democracy party Phidias Panayiotou said he would begin a hunger strike outside the Presidential Palace in Nicosia if VAT on electricity is raised from the current 5% to 19%. At the same time, he presented his own plan, which, according to his calculations, would make electricity in Cyprus around 20% cheaper.

Panayiotou outlined his three-point plan on the Sigma television programme “Mesimeri ke kati”. The first point is to retain the reduced VAT rate of 5%: this alone keeps bills around 12% lower. He noted that other EU countries, including Greece and Malta, also apply reduced rates to electricity.

The second point is to remove what the MEP calls the “double taxation” of emissions: the cost of emission allowances is already included in the tariff, and VAT is then charged on the total amount. Panayiotou proposes seeking an exemption from the EU and, until then, having the state cover the cost rather than consumers. He estimates that this would deliver another 1%.

The third point concerns the money returned to Cyprus from the emissions trading system. Because of electricity generation using fuel oil, the country spends €200–250 million a year on allowances, while around €120 million comes back. Panayiotou proposes investing half of this amount in grids, storage facilities and batteries, and returning the remaining €50–60 million to people through bill discounts, primarily for vulnerable groups. He estimates the effect at a further 5–6%.

According to the MEP’s logic, the state itself has an interest in expensive electricity: on a €100 bill at a 19% rate, the budget receives €19 in VAT. Panayiotou does not intend to end his “challenge” to President Nikos Christodoulides, which has already been going on for around 20 days. “Mr Christodoulides, if we repeat this every day and you do not act, I am not sure you will be re-elected,” he said.

Panayiotou nevertheless noted that the proposed measures are “temporary relief, not a solution”: ensuring Cyprus’s energy security requires major investment in infrastructure and energy storage.