Zero VAT is saving consumers 8 per cent – minister

Finance Minister Makis Keravnos on Monday said that “significant benefits have accrued to consumers” after the zero VAT measure on meat and vegetables came into effect last December.

The measure, which is set to continue through to May 31, includes meat, both fresh and frozen, and vegetables.

Already included in the list before the added measure were bread, milk, eggs, baby food and nappies, feminine hygiene products and adult diapers

“The average benefit to consumers from the application of zero VAT on the products covered by the measure amounts to approximately €7.50 on purchases totalling €95, or 8 per cent,” Keravnos told the Cyprus News Agency (CNA).

The minister added that the reduction has notably benefited consumers, either through price reductions or price stability.

“In the few cases where marginal price increases were observed, this is primarily due to external factors such as supply chain issues or increased production and import costs,” he clarified.

Keravnos stressed that without proactive government measures, the increases in prices “would have been significantly higher”.

“It’s important to remember that the zero VAT measure is part of a comprehensive package aimed at supporting the economy, with the ultimate goal of mitigating the impacts of high inflation while considering the fiscal capabilities of the economy,” Keravnos said.

He then assured that the government will continue to support the economy “through rational policies that simultaneously safeguard public finances where necessary”.

More specifically, the measure that came into effect in December includes the following meat items: fresh, chilled or frozen meat and variety meats (offal), beef, pork, sheep, goat, and poultry, as well as rabbit and hare.

Vegetables under the measure include fresh or chilled tomatoes, onions, shallots, garlic and leeks, cabbage, cauliflower and broccoli, collards, turnips, Brussels sprouts and similar vegetables.

Also included are salad foods, such as lettuce and radishes, carrots, turnips and other edible roots, cucumbers and gherkins, coriander and parsley.

Legumes with or without pods, such as peas and beans, are also included.

Additionally, the measure applies to asparagus, aubergines, celery, mushrooms, truffles, peppers, spinach, artichokes, unprepared olives, pumpkins, courgettes, capers and fennel.