Despite drop in peak inflation, government cuts VAT on essentials until 31 October 2023
The Cypriot Council of Ministers has now approved a temporary reduction in the reduced 5% and standard 19% rates on certain essential goods.
Cypriot inflation has now come off the 10.6% peak from July last year, and is now just over 6%. However, persistent rises on food – still at over 9% – has prompted the government to bring forward a zero-rating of certain essentials.
Other European inflation VAT cutsare common following inflationary disruptions to supply chains and the Russian invasion of Ukraine.
Goods subject to the cut include:
5% to zero:
- milk;
- bread;
- eggs; and
- baby food.
19% to 5%:
- detergents,
- fabric softeners,
- toilet paper,
- baby diapers,
- cleaning supplies; and
- adult diapers.
