VAT cut on basic goods has reduced prices

A VAT cut on seven basic goods has led to cheaper prices and been greeted positively by consumers, especially families, the Consumer Protection Association said on Monday.

The association said that the measure, which has seen VAT axed for bread, milk, eggs, baby foods, baby and adult diapers, as well as feminine hygiene products, has genuinely been applied across Cyprus, which they confirmed through checks.

However, the association noted that 25 categories of products recorded increases of more than 1 per cent in the last month, with the most important being presented in flour (7 per cent), rice (5 per cent), Cypriot coffee (5 per cent), oil (4.3 per cent), frozen pasta (5.3 per cent), fresh fish (10.6 per cent) and all categories of frozen fish 6-37 per cent (molluscs, fish and breaded fish) and breaded meat (2.7 per cent). Increases were also recorded in toilet paper (3.7 per cent), fabric softeners (3.3 per cent) and laundry detergents (1.1 per cent).

The association also said food inflation rose to 8.5 per cent from January to May 2023 compared to the corresponding period last year, as well as during the first quarter.

The association presents a weighted average price for 250 basic consumer products (food and other products), based on the quantities and prices per day, at which these products were sold in 400 retail outlets throughout Cyprus, over the past month.

The association clarified that price observatories are prepared solely for consumer information purposes and in no way constitute advice.

Price observatories are not intended and cannot substitute the market research that each consumer should do based on their own preferences, data, and needs, nor are they intended to indicate to consumers which outlets to choose or specific products.

It is particularly noted that some of the products included in the observatory have quality differences that cannot be determined.

The VAT axe was introduced at the beginning of May 2023.

The move is temporary and will apply from the date of publication of the decree until October 31.