Cyprus’s Council of Ministers has formally approved the extension of the zero Value Added Tax (VAT) rate on a selection of essential household products, providing relief for vulnerable citizens for an additional year.
The Extension Decision
The measure, initially set to expire in December 2025, will now remain in force until December 2026.
Finance Minister Makis Keravnos made the announcement following the Cabinet meeting on Wednesday, confirming the Ministry of Finance’s proposal was accepted. The extension is intended to directly alleviate financial pressure on low-income families and improve their overall standard of living.
Items Exempted from VAT
The tax exemption covers the following critical household goods:
- Infant Care: Baby milk (formula) and both baby and adult diapers.
- Hygiene Products: Feminine hygiene products.
- Fresh Produce: Fresh or frozen fruits and vegetables.
This targeted tax cut ensures that the price of these daily necessities remains lower for consumers.
Rationale: Supporting Vulnerable Groups
Minister Keravnos emphasized that the primary goal of keeping the VAT rate at zero is social support, even in a stable economic climate.
“Although inflation is zero for 2025, the government believes that the measure serves vulnerable groups, the vulnerable citizens of our country, and we want to maintain it.”
By eliminating the tax on these items, the government aims to increase the disposable income of struggling households, directly reducing their weekly expenditure on critical products.
Source: Stockwatch.com.cy