**Heating Oil Tax Cut Announced as Part of €70 Million Cost-of-Living Initiative**
In a significant move to alleviate the financial burden on citizens, the Cabinet of Cyprus has approved a €70 million package aimed at addressing the rising cost of living. One of the key components of this initiative is a reduction in the tax on heating oil, which will decrease by 5.3 cents per litre starting November 1. This adjustment will lower the excise duty on heating oil from 7.4 cents to 2.1 cents per litre, the minimum level allowed by the European Commission. This tax reduction is set to remain in effect throughout the winter season, lasting until April 30, 2027.
Finance Minister Makis Keravnos announced the package, which encompasses seven measures designed to support vulnerable populations and manage the escalating costs of essential goods and services. The measures include the extension of existing electricity subsidies, which were due to expire soon. These subsidies cover two specific schemes: the special domestic electricity tariff for vulnerable consumers, known as Code 08, and the low-voltage commercial electricity tariff, Code 10. Both schemes will now be extended through the year 2027.
In addition to the heating oil tax cut, the government is also implementing a zero VAT rate on a broader range of essential goods. This includes fresh fruits, vegetables, baby milk, baby nappies, adult incontinence products, and feminine hygiene products. The current zero VAT measure on meat, fish, and poultry will be renewed and expanded to include staple items such as bread, milk, coffee, sugar, and baby food. This expanded measure will take effect on October 12 and will remain in place until May 31, 2027.
Households looking to install residential photovoltaic systems will benefit from a VAT reduction from 19% to 9%. This change is expected to encourage the adoption of renewable energy sources among residents, promoting sustainability while also providing financial relief.
Furthermore, the package includes a one-off payment of €200 for eligible vulnerable citizens receiving public assistance. This direct financial support aims to help those most in need navigate the current economic challenges.
Another significant aspect of the initiative is the increased financial support for residents of mountainous areas. Approximately 10,500 households and 24,000 individuals will benefit from enhanced allowances, which will vary based on altitude. Residents living at altitudes between 600 and 800 meters will receive €175, those between 801 and 1,000 meters will receive €225, and individuals living above 1,000 meters will receive €260.
The total estimated cost of the seven measures combined is €70 million, reflecting the government's commitment to addressing the ongoing economic pressures faced by many citizens. The measures are designed not only to provide immediate relief but also to foster long-term sustainability through the promotion of renewable energy and essential goods access.
As the government moves forward with the implementation of these measures, citizens are encouraged to stay informed about the specifics of the initiatives and how they may benefit from the various forms of assistance being offered. The overarching goal of this comprehensive package is to support households during a challenging economic period, ensuring that essential needs are met while promoting economic stability in Cyprus.