Cyprus Mail

Zero VAT has had impact on shopping bills

inflation recession economy business cash supermarket cost of living

Consumers are saving approximately €7.50 on around €95 of purchases following the introduction of zero VAT rate on 11 products, the consumer protection service said on Monday.

According to the service, consumers, depending on the supermarket they are shopping in, are saving between €7.23 and €7.76 on a total purchase of €95.

The agency released the Consumer Product Price Watch for January 2024, which shows the weighted average price for 250 key consumer products (food and other products) based on the quantities and prices per day at which these products were sold in 400 retail outlets nationwide.

The purpose is to provide the consumer with an objective comparative record of purchase prices from all retail outlets, supermarkets, bakeries, kiosks, etc.

According to the January assessment, the inflation rate of December was maintained (1.7 per cent against 1.6 per cent), which is basically due to the large price fall in the clothing and footwear category of 13 per cent, while food and non-alcoholic beverages rose by 0.15 per cent.

However, compared to January last year the inflation rate rose by 2.81 per cent in the food category, which resulted mostly from a 4.4 per cent increase in the cost agricultural products.

The most significant increases compared to December were recorded for vegetable cooking oil by 16.7 per cent, flour by 11 per cent, almost all frozen foods, with frozen molluscs/shellfish first by 10.4 per cent, and frozen fish by 7.9 pe cent, frozen breaded meat by 5.1 per cent, frozen pasta by 3.1 per cent, yoghurt by 5.6 per cent, eggs by 5.4 per cent, juices by 5.3 per cent, Cypriot coffee by 4.4 per cent, soft drinks by 3.9 per cent, fresh fish/molluscs by 3.8 per cent, and oil by 3 per cent.

The price of vegetables/greens decreased by 24.3 per cent, sugar by 12.4 per cent, fresh meat by 7.9 per cent, bulgur wheat by 3.9 per cent, cold cuts by 2.7 per cent, cheese by 2.1 per cent and rolls by 2.1 per cent.

“The current assessment from the implementation of the measure [of zero VAT rate on certain items], based on the findings of the checks, is that it has had a positive effect on prices and thus on inflation, since prices are being contained and about 72 per cent of product prices have remained at the levels of May 5, 2023, when the measure was introduced. According to the findings of the last check, completed on 12/2/2024, compliance is universal with rates for milk, bread, vegetables, sugar, coffee and baby diapers at 75-100 per cent and for other products at a lower rate,” the service said.

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