MPs condemn ministry decision on tax free spending

The House commerce committee on Tuesday condemned a “unilateral” decision by the finance ministry to increase the minimum spend by third-country tourists to make them eligible for VAT returns.

The figure has gone from €50 to €100 starting June 2, and was a decision “taken without discussion with stakeholders or informing anyone,” Akel MP Costas Costa said.

“This is harming our tourism product and creates a terrible picture for us abroad”, because Cyprus is the country with the third highest minimum spend in the EU, he added.

He said the minimum spending for VAT return eligibility is at one cent in Spain, €4.50 in Turkey, while in Greece, Germany, Portugal and Malta it is €50.

“Despite the crisis we went through, the pandemic which cost us a whole lot of tourists, the ongoing war in Ukraine which led us to lose hundreds of thousands of Russian and Ukrainian tourists, we come in and create problems for our tourists.”

This is also going to cause serious consequences for small businesses that “live off tourists that buy from their stores,” Costa said.

The committee jointly sent a letter to the finance ministry to rescind the decision.

The MP charged that the change had become effective immediately and the two companies handling the matters at the airports and ports were not notified. “As a result, the three-day weekend during Kataklysmos was a mess.”

He added business associations such as the chamber of commerce (Keve), the federation of employers (Oev), small business owners (Povek) and the association of Cyprus Tourist Enterprises (Stek) were opposed to the move.