12° Nicosia,
19 June, 2024

Zero VAT rates fail to curb price surges

Consumer association raises concerns over soaring product prices


Many products subject to zero VAT rates saw unexpected price increases in July 2023, according to a report by Kathimerini The Consumer Association has raised concerns about the effectiveness of this measure following recent additions to the list of zero-rated items.

Key Findings:

In July 2023, 21% of products previously subject to zero VAT had higher prices than in April before the zero VAT rate was applied.

In July 2023, 27% of products with zero VAT rates had higher prices than in May, even after the implementation of the zero VAT rate.

Surprisingly, in July 2023, a whopping 83% of products with zero VAT rates were priced higher than the expected May prices, compared to the prices in April 2023 before the zero VAT rate took effect.

These findings suggest that three months after the introduction of the zero VAT rate, the prices of 83% of these products exceeded consumers' expectations, raising questions about the actual impact of this tax measure.

See the chart below: 

Cyprus  |  consumer  |  inflation

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