The government extends subsidies on electricity and fuel tax to relieve the cost-of-living crisis until spring, benefiting thousands of households and businesses in Cyprus. Additional support includes cash assistance for vulnerable groups, expanded aid for internally displaced persons, and tax adjustments to alleviate economic pressures.
What measures are being taken to alleviate the cost-of-living crisis?
- The government extends subsidies on electricity and fuel tax into the spring.
- Electricity subsidies last until April 30, with a tiered structure for different consumer groups.
- Fuel tax subsidy continues until March 31, reducing fuel costs by 8.33 cents per litre.
- Additional one-off cash support for vulnerable groups, especially families with children and single parents.
- Expanded assistance for internally displaced persons including home repair subsidies and mortgage support.
- Removal of the €350 annual company levy and extension of 0% VAT on meat and vegetables to aid businesses.
Economic Relief Measures
In a recent announcement, President Nikos Christodoulides informed the public that government subsidies on electricity and fuel tax will continue into the spring season. This decision is part of a comprehensive approach to lessen the cost-of-living pressures that many consumers are currently facing. Initially halted last summer, these subsidies made a comeback in October as a portion of a broader initiative valued at €196 million, aiming to provide financial relief to residents.
The prolonged electricity subsidy is now set to last until April 30, and the fuel tax subsidy will carry on until March 31. The structure of the electricity subsidy is tiered, catering to different consumer groups including residential, commercial, and industrial sectors. The level of subsidy provided will correspond with the amount of consumption, with an exception for those recognized as ‘vulnerable’ consumers who will receive full support against any rises in the basic tariff.
Subsidy Details and Impact
The subsidy program has had a significant reach, initially estimated to cover approximately 429,000 households and 106,000 businesses. A detailed subsidy rate table clarifies that for residential consumers, the aid varies from up to 85 percent for usage between 1 to 400 kilowatt-hours (kWh), to no subsidy for consumption over 800 kWh. Notably, the average household in Cyprus is estimated to use around 800 kWh on a bimonthly basis, highlighting the program’s potential to touch the lives of many.
On the other hand, the fuel tax subsidy simplifies the approach by directly lowering the cost of fuel. The government decreases the tax applied to fuel by 8.33 cents per litre, thereby making it more affordable for the everyday consumer. These measures demonstrate a direct response to the global energy pricing fluctuations and the local economic situation.
Additional Support for Families and Electric Vehicles
Beyond the subsidies, one-off cash support measures have been announced for particularly vulnerable groups within society. Single parents are set to receive a payment of €250 per child, with an additional sum provided to families with more than four children. This initiative is in conjunction with another €250 per child payment that will be distributed to all families with children, benefiting over 27,000 families across the country.
Moreover, due to the surging interest in electric vehicles that surpassed government projections, an extra €2 million has been allocated to the budget for the government’s electric car incentive program. This boost reflects a growing commitment to environmental sustainability and a pivot towards cleaner transportation solutions.
Expanded Assistance for Internally Displaced Persons
A suite of measures has also been implemented for internally displaced persons (IDPs), with the mortgage subsidy cap being raised from €130,000 to €200,000 and the maximum subsidy duration extended from 20 to 30 years. The income criteria for applications have been eliminated, making it more accessible for IDPs to benefit from these programs.
The subsidies for home repairs have doubled from €50,000 to €100,000, with the removal of income criteria for this aid as well. New provisions include extending student subsidies to also cover maintenance costs and the establishment of new lending plans for home renovations and purchasing household appliances for IDPs. These measures are complemented by the change that housing loan applications from IDPs will no longer consider their ownership of another home unless acquired through the same assistance scheme.
Tax and VAT Adjustments
In a move likely to benefit businesses, the government has removed the flat €350 annual company levy. Additionally, the VAT on meat and vegetables will remain at zero until the end of May, an extension of a policy that began in December. These fiscal adjustments are part of a broader effort to mitigate the financial strain on both individuals and businesses during challenging economic times.
What measures are being taken to alleviate the cost-of-living crisis?
- The government extends subsidies on electricity and fuel tax into the spring.
- Electricity subsidies last until April 30, with a tiered structure for different consumer groups.
- Fuel tax subsidy continues until March 31, reducing fuel costs by 8.33 cents per litre.
- Additional one-off cash support for vulnerable groups, especially families with children and single parents.
- Expanded assistance for internally displaced persons including home repair subsidies and mortgage support.
- Removal of the €350 annual company levy and extension of 0% VAT on meat and vegetables to aid businesses.
How long will the subsidies on electricity and fuel tax last?
The electricity subsidies are set to last until April 30, while the fuel tax subsidy will continue until March 31.
Who will benefit from the additional one-off cash support?
The additional one-off cash support is aimed at vulnerable groups within society, particularly families with children and single parents. Single parents will receive a payment of €250 per child, with extra funds for families with more than four children. Additionally, all families with children will receive a payment of €250 per child.
What additional support is being provided for internally displaced persons?
Internally displaced persons (IDPs) will benefit from expanded assistance, including an increase in the mortgage subsidy cap from €130,000 to €200,000, and an extension of the maximum subsidy duration from 20 to 30 years. Home repair subsidies have also doubled from €50,000 to €100,000, among other provisions.
