Supported by
The government has approved a package to combat high prices. Zero VAT and €200 in subsidies
Zero VAT on more products, electricity subsidies, and a one-time €200 payment for selected groups of residents – these are the solutions included in the anti-price package approved by the government on Wednesday, September 30. The aid also applies to home heating, photovoltaic installations, and residents of mountainous areas.
Finance Minister Makis Keravnos presented seven measures with a total value of approximately 70 million eurosTogether with existing measures, the cost of the support is expected to be approximately €160 million. Individual relief measures will come into effect at different dates.
The rest of the article is below
Who will receive a one-time 200 euro payment?
One of the elements of the package is one-time payment of 200 euros to 53,511 eligible recipientsThe aid will go to specific groups receiving public benefits.
The Minister indicated the recipients of the guaranteed minimum income, people with disabilities receiving mobility allowance, families covered by support for low-income pensioners and large families receiving child benefit.
ONE-TIME HELP
200 euros – who is covered?
- People receiving guaranteed minimum income (EEE).
- People with disabilities receiving mobility allowance.
- Families covered by support for low-income retirees.
- Families with at least three dependent children receiving child benefit.
What can the money be spent on?
For any needs, including heating. The announcement did not specify a payment date or the application procedure.
For any needs, including heating. The announcement did not specify a payment date or the application procedure.
This benefit is not universal for all residents. Individuals in these groups should monitor information regarding the benefit. Based on the decision presented, it is not yet possible to determine whether an application will be necessary.
Zero VAT on bread, dairy products and coffee
The government will extend zero VAT on the current list of essential items throughout 2027. This includes fresh fruit and vegetables, milk, baby and adult diapers, and feminine hygiene products.
A separate decision applies to meat, fish, and poultry. The zero rate on these products has been extended, and the list has been expanded to include bread, milk and dairy products, coffee, sugar and baby food.
The extended list is to apply from October 12, 2026 to May 31, 2027The approval of the package does not mean that all the items listed will be subject to zero VAT from the beginning of October.
Anti-price package - key dates
Some decisions extend the current arrangements for another year. Others have a specific start date or require the regulations to be published.
| Solution | Deadline |
|---|---|
| Electricity surcharges in tariffs 08 and 10 | Extension until 2027 |
| Zero VAT on the current list of basic items | Extension until 2027 |
| Extended zero VAT, including on bread, dairy products and coffee | October 12, 2026 – May 31, 2027 |
| Lower excise tax on heating oil | November 1, 2026 – April 30, 2027 |
| VAT 9% on the purchase and installation of home photovoltaics | After the publication of the relevant regulation |
| One-time 200 euros for eligible recipients | The payment deadline was not specified in the announcement. |
Electricity subsidies throughout 2027
Subsidies for households using the tariffs 08, intended for recipients belonging to groups particularly vulnerable to financial hardship. The program covers approximately 23,300 households.
The support is intended to cover 100 percent of the increase in energy costs included in the subsidy mechanism. This does not mean that the entire electricity bill will be paid by the government. The aid applies to the increase covered by the program.
Subsidies will also be maintained for approximately 82,500 commercial customers on tariff 10. In their case, the amount of support depends on consumption and can reach 85% of the cost increase covered by the mechanism.
Cheaper heating and more help in the mountains
From November 1st to the end of April 2027, the excise tax on heating oil will decrease from 7.4 to 2.1 cents per literThe difference is 5.3 cents per liter.
For a purchase of 1,000 liters, this translates to a reduction in excise duty alone of €53. However, the final heating price will also depend on the fuel price from the supplier.
Support for residents of mountainous areas will also be increased. The government announced an increase in the portion of aid per household by €50, depending on the altitude of the town, and an increase of €35 from the current per-person amount.
The program covers approximately 10,500 households and 24,000 eligible individuals.
Photovoltaics with VAT 9%.
The anti-price package also includes a reduction in VAT purchase and installation of home photovoltaic systems from 19 to 9 percent The change is to take effect after the relevant regulation is issued.
For those planning to install solar panels, the effective date of the regulations will be crucial. Mere approval of the reduction by the Council of Ministers does not necessarily mean that the lower tax rate will apply to a specific order.
Residents already know the scope of the aid, but details regarding its implementation are still needed. This primarily concerns the deadline for disbursing the €200 subsidy, the principles for increased support for mountain areas, and regulations defining new VAT rates.
Sources: Ministry of Finance, Cyprus Mail
