The Cabinet meeting concluded on Thursday afternoon and a total of 17 measures were reportedly approved to relieve consumers from the effects of inflation, but also to provide assistance for the acquisition of affordable housing, by purchase or rent, and for the installation of rooftop photovoltaic panels for self-generation at a lower cost.
Among the decisions is the zeroing of VAT on meat, dairy products, and vegetables. It was also decided to extend the allowance for students of large families.
The 11 measures with a direct positive impact (€141 million)
Cascading electricity cost subsidies
- for the billing months 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 prices.
- The Bimonthly Tariff 46 “Water Pumping” is excluded from the reintroduction due to corresponding measures taken by the Ministry of Agriculture.
- Further, reinstatement of similar reliefs to customers of suppliers other than EAC will be treated accordingly, provided that the approved capacity of the substations of such customers does not exceed 70kVA (100A 3-F) and for those cases where increased tariffs arise due to an increase in fuel costs for power generation, provided that the contracts between them provide for passing on such additional costs.
- The estimated cost of reintroducing the measure is around €45 million.
- covers 429,000 homes and 106,000 businesses.
2. Reduction of excise duty on motor fuels
- 8.33 cents per liter, including VAT, to the minimum rates under the acquis
- for the months of November 23 – February 24 (petrol from €0.429/liter to €0.359/liter and diesel from €0.40/liter to €0.33/liter).
- The budgetary cost is estimated at €21.8 million.
3. Reduction of excise duty on heating oil
- to the minimum rate under the acquis (from €0.07473/liter to €0.021/liter) (by 6.39 cents per liter, including VAT, depending on weather conditions)
- for the months of December 2023 – March 2024.
- The budgetary cost is estimated at €3.8 million.
4. Solar PV for all scheme
- The Plan will provide beneficiaries with the possibility of installing a photovoltaic system without the payment of an initial capital. Beneficiaries will receive a grant of €1000 and the remaining amount will be repaid in a bi-monthly installment of €150 through the electricity bill when the PV system starts generating electricity for the premises. The amount of the project is estimated at €30 million and will come from the Renewable Energy Sources (RES) and Energy Conservation Fund, which is the main financial instrument of the Republic of Cyprus for the promotion of RES and Energy Conservation. The reserve of the RES and Energy Conservation Fund currently stands at over €70 million.
5. Photovoltaics in Business Project
- Increasing the power of self-generation and self-consumption of electricity through PV
- It will enable businesses to install PV 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 on basic goods – Addition of meat and vegetables
- from 1 December 2023 to 31 May 2024.
7. Inclusion of students of large families in the Child Benefit
- This new category of beneficiaries will receive 50% of the allowance.
- It concerns students obtaining a first-degree
- Up to the age of 23 for girls and 24 for boys, if they are students.
- Number of potential beneficiaries: 3860 large families receiving child benefit
- The budgetary cost is estimated at €3.3 million.
8. A 5% increase in child benefit.
- The budgetary cost is estimated at €3.7 million.
9. Allowance for disabled persons
- Allocation of a one-off amount of €120 to disabled persons/ recipients of transport allowance.
- The budgetary cost is estimated at €500k.
10. Rent allowance for recipients of Minimum Guaranteed Income (MGI)
- Grant of a one-off amount of €300 to MGI beneficiaries receiving a rent subsidy/housing loan interest rate; and
- €500 to severely disabled MGI beneficiaries receiving a rent/mortgage interest subsidy.
- The budgetary cost is estimated at €965k.
11. 2% subsidy scheme for housing interest rate subsidy
- This concerns loans contracted from 1/1/2022 to 31/12/2023.
- The Scheme will cover the purchase and construction of a first home, 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 €20 million.
Housing policy – Six measures worth €55 million
The State will make the biggest intervention in housing to tackle the housing problem. The housing policy includes the following measures:
12. Housing subsidies for young couples and young people
13. The ‘Renovate – Rent’ scheme,
14. Strengthening existing urban incentives
15. New ‘Build and Rent’ scheme
16. Construction of housing units for social housing
17. Allocation of land in the countryside for low-income families.
The housing policy measures will be presented in detail by the Minister of Interior next week.
