Cyprus will cut value-added tax (VAT) on electricity bills from 19 per cent to 9 per cent for nearly 494,000 households starting from April 1.
President Nikos Christodoulides revealed the tax reduction measure during a multi-channel interview marking his administration’s two-year anniversary. The reduced VAT rate will remain in effect for one year, until March 31, 2026.
The Cabinet has approved the relevant decree which was published today in the Official Gazette of the Republic.
The tax cut applies to residential electricity consumption under specific tariff codes, including single-register domestic use (code 01), dual-register domestic use (code 02), special domestic tariffs for vulnerable consumer categories (code 08), and thermal energy storage (code 56) for consumers under the previously mentioned tariff categories of the Electricity Authority of Cyprus.
According to government calculations, the average small to medium-sized household can expect savings of approximately €20 on their bi-monthly electricity bills. For a household consuming 800 kilowatt-hours every two months, this represents annual savings of around €120.
The temporary tax reduction will cost the state an estimated €40 million in lost revenue over the 12-month implementation period.
