Newsroom
Households in Cyprus will continue to pay lower VAT on their electricity bills for another year, after the Council of Ministers approved an extension of the reduced tax rate through March 31, 2027.
The decision was taken at Wednesday’s Cabinet meeting and comes as electricity prices remain stubbornly high.
Finance Minister Makis Keravnos said the current reduced VAT rate on electricity is set to expire on March 31, 2026. However, with electricity prices showing no meaningful drop compared to last year, the government decided to keep the measure in place for an additional 12 months.
“The price of electricity supply has not decreased compared to the corresponding period last year,” Keravnos said, explaining the reasoning behind the extension.
The move is expected to cost the state around €40 million, but the government sees it as part of a broader effort to ease the burden of high energy costs and support household incomes.
The reduced VAT rate was introduced as a temporary relief measure during a period of rising energy prices. By extending it, the government aims to provide continued breathing room for families who are still feeling the pressure from higher living costs.
For consumers, the decision means electricity bills should remain lower than they would have been under the standard VAT rate — a small but steady cushion as energy prices remain elevated.
