The government has partially reversed its decision to end inflation relief measures, reintroducing zero VAT rates on six essential product categories just weeks after announcing their termination.
Finance Minister Makis Keravnos said the government would reinstate zero VAT on children’s nappies, adult nappies, infant formula, feminine hygiene products, vegetables and fruits. “By monitoring the price developments, we feel that this is the time for this category of products to return to the zero VAT rate,” Keravnos stated.
The reversal comes after the 25 September announcement to end all anti-inflation measures, including electricity subsidies by October’s end. The unexpected policy shift has caught coalition parties off guard, as they were preparing their own proposals for a scheduled meeting with Deputy Minister to the President, Eirini Piki.
Unlike previous temporary measures, the reintroduced zero VAT rates will have no set expiration date. The decision follows significant public backlash when VAT on essential items returned to 19 per cent, affecting many households’ budgets.
The government maintains that the decision was not influenced by political pressure, with Keravnos emphasising that policies are implemented “based on the needs of society and the economy” rather than populism.
Whilst the electricity subsidy remains scheduled to end, the government has not ruled out reviewing this decision, noting they are monitoring energy price developments.
The administration also indicated it would gradually announce additional relief measures as part of a broader tax reform, expected to be fully implemented by 2026. These could include compensatory measures from green tax implementation and increases in tax-free allowances.
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