Cyprus has postponed the implementation of green taxes that were expected to take effect in May, according to Finance Ministry Director General Andreas Zachariades.
The carbon tax on fuels will be delayed until summer, while the overnight accommodation levy will likely be pushed back to late 2026 as it is not linked to the EU Recovery and Resilience Plan, Zachariades told the Cyprus News Agency on Thursday.
“We still have some leeway because the EU process has a time delay, but this is something that needs to be done in the next 2-3 months,” Zachariades said regarding the carbon tax legislation. “It won’t be in May, it could be during the summer,” before parliament recesses.
The carbon tax is calculated at nearly 6 cents per litre (5.95) for this year and will increase by another 10 cents in 2026. Zachariades noted that regardless of this tax, carbon taxation will be implemented anyway in 2027 through the European ETS2 emissions trading system.
“The cost in 2027 is estimated to be around 18-20 cents,” he said, clarifying that the 6 cents to be imposed this year will not be additional to the 18 cents in 2027 but will be deducted from it. “This is not something we can avoid”.
The tax is expected to generate revenue of approximately €70 million over the next 18 months, which will fund compensatory measures including subsidies for vulnerable groups and vehicle replacement schemes, though the final allocation is still pending.
Regarding the overnight accommodation levy of €2.50 per night, which affects the hotel industry, Zachariades said this measure is not a commitment to the European Commission and will be handled differently.
“There is agreement with hoteliers to a good degree. It will most likely be implemented in 2026, perhaps towards the end to catch the next tourist season,” he said, adding that compensatory measures targeting hoteliers will also be provided.
Of the other green taxes, Zachariades noted that the green water levy, which involves a charge of €0.01 per cubic metre, has already been passed, while the waste levy is still pending.
(information from CNA)
