Factsheet for measure
CY-2022-11/2423
–
Updated
– measures in Cyprus
Tax cut on fuel
Μείωση φόρου κατανάλωσης καυσίμων
Background information
On 3 March 2022, the Cabinet decided a reduction in fuel consumption tax within the context of policies of the government to mitigate the inflation and the effects of the war in Ukraine. The bill, which amends the basic tax law, was approved by the House of Representatives on 8, March 2022 under the procedure of emergency (Law 21(1)/2022).
Content of measure
The Law provides for the temporary reduction of fuel tax from 8 March 2022 to 1 June 2022. More specifically, the law provides for:
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reduction of the rate against classes 1,2,3,4 from €429 per 1,000 liters to €359 per 1,000 liters,
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reduction of the rate against classes 6 and 10 from €400 per 1,000 liters to €330 per 1,000 liters and
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reduction of the rate against the classes 7,9,11 from €74,73 per 1,000 liters to €21 per 1,000 liters
As explained by the Minister of Finance, this is a reduction of 7 cents a litre for diesel and petrol, amounting to 8.3 cents per litre if VAT is included, as well as a reduction of 6.4 cents per litre including VAT on heating oil.
Updates
The following updates to this measure have been made after it came into effect.
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27 June 2022
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On 27, May 2022 the Cabinet decided the extension of the measure covering the period until 31 August 2022.
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Use of measure
The measure does not target particular groups but the general population, which is assumed to be the final beneficiary.
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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Applies to all businesses
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Applies to all citizens
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Actors and funding
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Actors
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Funding
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National government
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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No involvement
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No involvement
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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No involvement
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Main level of involvement: N/A
Involvement
The measure was decided by the government and approved by the House of Representatives after the pressure exercised by the sum of political parties, social partners and civil society with the on-going increases of fuel and other essential consumers’ goods. No structural dialogue has been proceeded the decision but political parties and social parties have submitted their suggestions to the government for the confrontation of expensiveness. No social partner or political party is involved in the implementation and monitoring of the measure as the Ministry of Finance is in charge of the process.
Views and reactions
Despite the fact that the measure was welcomed by political parties and social partners, the government received many criticisms by the opposition parties, in particular, for delays in taking measures but for the need for the expansion of the measures to mitigate the growing trend of prices in essential consumers’ goods.
Sources
