Immediate and medium-term measures to support households and businesses were decided today by the Council of Ministers, which met under the chairmanship of the President of the Republic, Nikos Christodoulides.
An important aspect of the package is that it includes measures that provide permanent solutions to tackle energy prices and the housing problem.
The Government’s goal is to offer holistic and sustainable solutions to energy and housing, and to relieve thousands of citizens and businesses from the relevant costs.
Among the decisions is the zeroing of VAT on meat, dairy products and vegetables. It was also decided to extend the allowance for students with large families.
The 11 measures with immediate positive impact (€141m)
1.Tiered subsidy for electricity costs; for the billed months of November 2023 – February 2024, for electricity bills metered until 29.2.2024
— covers residential, commercial and industrial consumers; for vulnerable consumers
— the subsidy covers 100% of the increase in electricity price.
• The Bimonthly Tariff 46 «Water Pumping» is excluded from the reinstatement due to the adoption of corresponding measures by the Ministry of Agriculture and Rural Development (IQR).
• Furthermore, the reinstatement of similar benefits to customers of suppliers other than EAC will be treated accordingly, provided that the approved capacity of these customers’ premises does not exceed 70kVA (100A 3-F) and for those cases where increased tariffs arise due to an increase in fuel costs for electricity generation, provided that the contracts between them provide for the pass-on of this additional cost.
• The estimated cost of reinstating the measure amounts to €45 million. approx.
• covers 429,000 homes and 106,000 businesses
2. Reduction of excise duty on motor
fuels• by 8.33 cents per litre, including VAT, to the minimum rates under the acquis communautaire
• for the months November 23 – February 24. (petrol from €0.429/litre to €0.359/litre and diesel from €0.40/litre to €0.33/litre).
• The budgetary cost is estimated at €21.8m.
3. Reduction of excise duty on heating oil• to the minimum rate based on the acquis communautaire (from €0.07473/liter to €0.021/liter) (by 6.39 cents per liter, including VAT, depending on weather conditions)
• for the months December 2023 – March 2024.
• The budgetary cost is estimated at €3.8 million.
4 Photovoltaics for All Scheme • The Scheme will provide beneficiaries with the opportunity to install a photovoltaic system without paying an initial capital. The beneficiaries will receive a grant of €1000 and the remaining amount will be repaid with a bimonthly instalment of €150 through the electricity bill, when the production of electricity from the photovoltaic system for the premises will begin. The amount of the project is estimated at €30 million, which will come from the Renewable Energy Sources (RES) and Energy Saving Fund (RES), which is the main financial tool of the Republic of Cyprus for the promotion of RES and EE. The reserve of the RES-EE Fund is currently over €70 million.
5.Project Photovoltaics in Enterprises
• Increase of self-generation power and self-consumption of electricity through PV
• It will enable businesses to install photovoltaic systems, through virtual net-billing, up to 1MW with storage and up to 400kW without storage, with a maximum capacity of 30MW.
6. Application of zero VAT rate to essential items – Addition of meat and vegetables
— from 1 December 2023 until 31 May 2024.
Inclusion of students with large families in the Child Allowance• 7.This new category of beneficiaries will be paid 50% of the allowance.
• For students to obtain a first degree• Up to 23 years old for girls and 24 years old for boys, if they are students. (Instead of until the end of military service as it is currently in force)
• Number of potential beneficiaries: 3860 large families receiving child
benefit• The budgetary cost is estimated at €3.3m.
8.5% increase in child benefit.
• The budgetary cost is estimated at €3.7m.
9. Allowance for people with disabilities• Provision of a lump sum of €120 to people with
disabilities / recipients of mobility allowance.
• The budgetary cost is estimated at €500th.
10. Rent Allowance for UGS
Recipients• Lump sum of €300 to UGS beneficiaries who receive rent/interest subsidy on a housing loan and
• €500 to UGS beneficiaries with severe disabilities who receive rent subsidy/mortgage interest subsidy.
• The budgetary cost is estimated at €965k.
11 Scheme for subsidy of 2% interest rate on housing interest
rates — Concerns loans concluded from 1/1/2022 until 31/12/2023.
• The Scheme will cover the purchase and construction of a primary residence, with a maximum subsidy for a period of 2 years.
• For families with an annual income of €50,000
• The budgetary cost is estimated at €20m.
Housing policy – Six measures worth €55 million
The state will carry out the largest intervention in housing issues to address the housing problem. Housing policy includes the following measures:
12 Housing Subsidy for young couples and young people
13 «Renovate – Rent» scheme,
14 Strengthening existing urban incentives
15 New Plan «Building and Renting»
16 Construction of housing units for social housing
17 Allocation of plots in the countryside for families with low incomes.
The housing policy measures will be presented in detail by the Minister of Interior next week.
The above measures follow the decisions already taken by the government, such as:
• renewal of the ATA agreement, which benefited 180,100 workers (80,000 in the private sector and 100,100 in the public sector);
• increase of welfare benefits; • increase of the allowance for low-income pensioners; • reduction of the special contribution to defense on the tax collectable; • increase of the allowance for mothers with many children; • application of the zero rate to basic necessities;
• building plan.