House votes to cut VAT on electricity bills to 9 per cent (updated)

Parliament on Friday approved an opposition proposal to cut VAT on electricity bills from 19 per cent to 9 per cent across the board for an indefinite period.

The proposal was passed with 31 votes in favour and 14 against. One MP abstained.

Before that, the plenum rejected an amendment to cut VAT on household bills to 5 per cent starting on November 1, until April 31, 2022.

The bill must be signed by the president to come into force. A government source told the Cyprus Mail that the president will veto the bill and send it back to parliament.

Main opposition Akel leader Stefanos Stefanou said the proposal was a substantive measure that will help consumers amid a wave of price hikes.

Stefanou accused ruling Disy leader Averof Neophytou of trying to take the credit for the proposal.

The government opposed the proposal, with Finance Minister Constantinos Petrides urging opposition parties to avoid tabling proposals that have a huge impact on public finances, especially when they affect state revenues and expenditures on a permanent basis and without being targeted.

Instead, Petrides proposed cutting VAT just for household electricity bills from 19 per cent to 9 per cent for three months.

Diko MP Christiana Erotokritou said the proposal was in line with the European Commission toolbox to fight the rise in energy prices.