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Significant Measure by the Government: VAT Reduction on Electricity

Published March 27, 2026, 07:17
Significant Measure by the Government: VAT Reduction on Electricity

The President of Cyprus, Nikos Christodoulides, announced a package of measures to address rising prices and provide relief to households and businesses. The most significant measure is a further reduction in VAT on electricity, from 9% to 5%, which will be in effect from May 1, 2026, to March 31, 2027. The reduction in VAT on electricity is considered particularly important, as it is expected to be passed on to consumers more easily and correctly, unlike the reduction in fuel tax, where there is concern about potential profiteering. The government is committed to intensifying controls to protect consumers. In addition to the reduction in VAT on electricity, the package of measures also includes a reduction in fuel tax. The government estimates that the reduction in VAT on electricity will help to contain potential price increases, as the EAC is controlled and cannot raise prices by absorbing the reduction. So far, there have been no increases in the price of a kilowatt-hour, which remains at 26 cents. The EAC reports that the reduction in VAT to 5% will help households, as it will absorb any potential increases in the future.