NICOSIA, March 26 (Reuters) - Cyprus will further cut value-added tax on electricity bills, reduce fuel taxes and subsidise salaries in the key tourism industry to help people cope with cost increases
Cyprus Cuts Taxes and Subsidises Tourism to Offset Costs of Iran War
Government Measures to Address Economic Impact
NICOSIA, March 26 (Reuters) - Cyprus will further cut value-added tax on electricity bills, reduce fuel taxes and subsidise salaries in the key tourism industry to help people cope with cost increases due to the U.S.-Israeli war on Iran, President Nikos Christodoulides said on Thursday.
Tourism Industry Challenges
Cyprus, the European Union country closest to the Middle East, has seen a slowdown in tourism bookings as the conflict affecting the region raises security concerns among travellers, after a British base on the island was hit by a drone on March 2.
Details of the Relief Measures
Implementation Timeline
Christodoulides said the measures will take effect in April and May and will have varying durations.
Subsidies and Tax Reductions
Tourism Sector Salary Subsidies
The measure to subsidise salaries in the tourism sector by up to 30% applies for April 2026, while a VAT reduction to 5% on household electricity bills will apply until March 2027, he said. The VAT rate on electricity has already been slashed to 9% from 19%, due to the energy crisis caused by the war in the Middle East.
(Reporting by Michele Kambas, Writing by Edward McAllister, editing by Andrei Khalip)
