Cyprus: Slashed VAT expected to ‘bring inflation and prices down’ says Finance Minister

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While inflation rates have fallen in Cyprus for a sixth consecutive month, consumer prices went up by 0.3 per cent in April after a 1.02 per cent rise in March. In an interview with Euronews, Finance Minister Makis Keravnos explained the move to cut costs.

In Cyprus, consumer prices for more than 1,700 goods fell last week after the government decided to scrap VAT on a wide range of basic products, such as bread, milk, eggs, and personal hygiene goods to alleviate financial difficulties, especially on middle-income professionals and young families 

Finance Minister of Cyprus, Makis Keravnos told Euronews the measure, initially planned for six months, might be expanded if necessary.

“In an effort to bring relief to households, especially the most vulnerable, we decided to bring VAT to zero on a number of goods that consumers use on a daily basis,” he said. 

“The measure will last for six months. We expect it will bring inflation and prices down. In any case, we will reassume the situation after six months to decide if there is a need to expand the measure.

“The target is gradual and we hope by the end of the year there will be a reduction in inflation.”

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