Cyprus government approves temporary fuel tax reduction

The Cypriot government has introduced an urgent bill to reduce excise taxes on motor fuel by 8.33 cents per liter for gasoline and 6 cents per liter for diesel. This measure, aimed at mitigating price increases caused by geopolitical tensions in the Middle East, is expected to be implemented starting April 4, 2026, following parliamentary approval and official publication. The policy is scheduled to remain in effect until the end of June, with the total cost estimated at 18.6 million euros. Naya Symeonidou, head of the Ministry of Finance's Tax Policy Unit, noted that the start date was postponed from April 2 to allow companies sufficient time for price adjustments. Additionally, a zero VAT rate on meat, poultry, and fish will be implemented alongside ongoing subsidies for farmers covering 15% of fertilizer and agricultural supply costs for April and May. Furthermore, a reduced 5% VAT rate for residential electricity consumption is set to apply from May 1, 2026, until March 31, 2027. The government's overall strategy aligns with Eurogroup recommendations for temporary and limited support measures.