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25 July, 2024
 
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Government's fuel tax reduction faces 24-hour delay

Reduction of consumption tax on fuel to encounter a delay

Newsroom

The government's plan to reduce the consumption tax on fuel is encountering a significant delay, postponing the expected relief for consumers. Originally set to take effect on November 1st, the reduction in fuel prices now faces a delay of approximately 24 hours, pushing the new start date to Friday, November 3rd.

According to a report on Philenews, this unexpected delay stems from a critical hurdle in Parliament. According to a reliable source within the parliamentary circles, the bill has not even made it to the discussion stage. The failure to progress the bill as planned has raised concerns and questions about the government's ability to swiftly address the ongoing issue of rising fuel prices.

The government's commitment to combat inflation led to the approval of two key bills by the Cabinet last Wednesday. One of these bills aims to lower the excise duty on motor fuels, including unleaded petrol and diesel, by 8.33 cents per liter. The proposed timeline for this tax reduction was from November 1, 2023, to February 29, 2024, with a budgetary allocation of €21.8 million. The urgency of this measure was highlighted, emphasizing the need for a swift examination in Parliament.

However, the unexpected cancellation of the parliamentary session due to the absence of a significant number of Deputies overseas has derailed the plan. As a result, consumers may have to wait an extra day for the tax reduction to take effect. The Plenary of the Parliament is now expected to approve the bill on Thursday, November 2nd, making it operational the following day. This delay will inevitably extend the duration of the tax reduction, pushing it until March 3, 2024.

In a separate development, the second bill, which addresses a reduction in consumption tax for heating oil by 6.39 cents per liter, follows a different schedule. Unlike the fuel tax reduction, it is not bound by a specific timeline. This measure is scheduled to be implemented from December 1, 2023, until March 31, 2024, with a budget allocation of €3.8 million. The Ministry of Finance argues that this delay is justifiable due to prevailing weather conditions.

In addition to the fuel and heating oil tax reductions, changes in VAT rates are on the horizon. As of November 1st, zero VAT will be applied to coffee and sugar until April 30th. Essential items like bread, milk, eggs, baby food, diapers, feminine hygiene products, and adult diapers will also enjoy zero VAT until the end of April. Starting from December 1st, VAT will be zero on meat and vegetables, continuing until May 30th.

This delay in implementing the fuel tax reduction raises questions about the government's ability to provide timely relief to consumers in the face of escalating fuel prices, a matter of increasing concern for the public.

[With information sourced from Philenews]

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Cyprus  |  energy  |  economy  |  fuel

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