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Cyprus

Employers want lower VAT on electricity bills for 3 months

electricity

The Employers and Industrialists Federation (Oev) are suggesting VAT on electricity bills is lowered to five per cent across the board for the next three months to help contain costs and maintain consumer spending.

Their call, made in a letter to Finance Minister Constantinos Petrides, came a few days after cabinet decided to lower VAT from 19 per cent to 5 per cent on electricity bills for vulnerable groups for six months to help ease the impact of costlier power.

In his letter, Oev president Antonis Antoniou said electricity costs affect businesses across the board, as well as production and service costs.

In addition to the VAT reduction, the letter suggested that businesses should absorb the rising costs of transport and raw materials, wherever possible, “to rein in the rising wave of prices for goods and services which will inevitably be passed on to the consumer in any other case”.

The letter finally said that Oev is “certain that keeping consumption high will make up for part of the losses incurred by the suggested VAT cuts”.

In support of his statements, he told the Cyprus News Agency that in the first 10 months of 2021, households saw 800 key goods and services rise by only 2 per cent as opposed to 2020, but with pressure mounting, “we must keep calm and spend wisely as consumers”.

Antoniou added that Oev expects to see the state contributing to the efforts in the form of tax relief “so we can all share the costs as equally as possible in the hope that this phenomenon is temporary, and the situation improves”.

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