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In a decisive move to support Cyprus' households and businesses, the Council of Ministers, under the leadership of President Nikos Christodoulides, unveiled a comprehensive package of immediate and medium-term measures today.
These measures are poised to address pressing issues, including energy reliability and housing concerns, while aiming to provide sustainable solutions that will alleviate financial burdens on both citizens and enterprises.
The heart of the proposal lies in its financial prudence. The set of measures has been meticulously costed to align with the country's fiscal potential. The package comprises 11 immediate actions designed to have a positive and tangible impact, representing a financial commitment of €141 million. Additionally, a further six housing policy measures, totaling €55 million, are set to be deployed.
This announcement arrives against the backdrop of an ever-evolving international landscape with far-reaching implications across various sectors. The government faces the task of responsibly managing a complex state of affairs, particularly within the energy sector and the broader economy. The priority remains on fiscal responsibility, combined with a commitment to enhancing the daily lives and overall quality of life for the people.
Among the critical measures being introduced are:
1. Tiered Subsidy of Electricity Costs: This measure targets residential, commercial, and industrial consumers, providing relief for electricity costs from November 2023 to February 2024. Vulnerable consumers stand to benefit significantly, with the subsidy covering 100% of their electricity price increase.
2. Reduction of Excise Duty on Motor Fuels: A reduction of 8.33 cents per liter, including VAT, is set for motor fuels during November 2023 to February 2024. This will notably affect petrol and diesel prices.
3. Reduction of Consumption Tax on Heating Oil: A minimum rate adjustment based on the acquis is in effect for heating oil from December 2023 to March 2024. This measure takes into account weather conditions.
4. Promoting Solar Energy: The government has introduced photovoltaic design projects that will allow beneficiaries to install solar energy systems without the need for an initial capital investment. Beneficiaries will receive a grant of €1,000, with the remaining amount repaid through bimonthly installments on their electricity bills.
5. Zero VAT Rate on Basic Necessities: The government is implementing a zero VAT rate on essential items, including meat and vegetables, from December 2023 to May 2024.
6. Inclusion of Students in Child Benefit: Students from large families pursuing their first degree will now receive 50% of the child allowance.
7. 5% Increase in Child Benefit: A 5% increase in child benefit will provide additional support to eligible families.
8. Disability Allowance: A €120 lump sum will be granted to individuals with disabilities or recipients of a trafficking allowance.
9. Rent Allowance for Beneficiaries: Beneficiaries receiving rent or interest subsidies on home loans will receive a lump sum of €300 or €500, depending on their disability status.
10. 2% Mortgage Rate Subsidy Plan: A subsidy plan is being introduced for loans concluded between January 1, 2022, and December 31, 2023. Families with an annual income of €50,000 are eligible for this program.
Recognizing the housing issue, the government is committed to a robust housing policy with a financial commitment of €55 million. This includes measures such as housing subsidies for young couples, urban incentives, and new housing construction to address the housing problem. More detailed information regarding these measures will be provided by the Interior Minister in the coming week.
These measures come as an extension of previous government decisions, including renewing the Ata agreement and boosting welfare benefits and pensions.
The unveiling of this multifaceted plan demonstrates the Cyprus government's resolve to not only weather the challenges posed by the changing global landscape but also to provide concrete and tangible relief for its citizens and businesses. With a focus on fiscal responsibility and the well-being of its people, these measures are set to have a significant impact on the nation's economic outlook.
