Eight-Measure Package Announced in Cyprus: 5% VAT on Electricity and Zero VAT on Meat and Fish

On March 29, 2026, the government in Cyprus announced a package of eight measures to mitigate rising prices: tax reductions on fuel and electricity, zero VAT on certain products, and subsidies for hotels, airlines, and agriculture.

The package includes: reducing VAT on electricity for domestic consumers to 5% from May 1, 2026, to March 31, 2027; reducing the special excise duty on motor fuels by 8.33 cents per litre from April to June; zeroing VAT on meat, poultry, and fish from April 1 to September 30; abolishing the "green" fuel tax (9 cents/litre); a subsidy of up to 30% on the payroll for hotels remaining open in April; support measures for airlines to maintain connectivity; and two 15% subsidies on fertilizers and agricultural supplies in April and May. The government estimates the total volume of intervention at over €200 million.

The Central Bank of Cyprus (Κεντρική Τράπεζα) forecasts GDP growth of 2.7% and inflation of 2.7% in 2026. Meanwhile, critics note that the measures are largely horizontal and not sufficiently targeted at low-income groups and vulnerable families; economist Stelios Platis (Στέλιος Πλατής) emphasizes the large share of spending on basic goods in the budgets of such households.

The practical benefit for residents depends on the tax reductions being reflected in shelf prices. The Consumer Protection Service (Υπηρεσία Προστασίας Καταναλωτή) recorded a difference of €131.61 between the most expensive and cheapest baskets of products, while the price increase for fresh fish and mollusks over the month reached 14.9%. The Cyprus Consumers Association (Κυπριακός Σύνδεσμος Καταναλωτών) estimates the savings for an average household from the reduction in VAT on electricity at approximately €6 per month (≈€12 for two months) at current prices.