CYPRUS: Christmas comes early for motorists as fuel tax gets the chop

Good news for Cyprus motorists as filling up their tanks will cost them 6 euro cents less per litre as of 18 December after a bill was unanimously approved by parliament on Wednesday.

The bill submitted by ruling DISY’s leader Averof Neophytou and DIKO president Nicolas Papadopoulos, will see all petrol/diesel prices drop by 5 euro cents as a result of a reduction in the special consumption tax, and another cent resulting from a reduction in VAT.

The reduction may be good news for motorists but according to data presented by the Finance Ministry cheaper fuel will cost the state EUR 48.4 mln, that is without calculating the reduction of the VAT which will bring losses up to 57.5 mln.

The 5 cent reduction in the consumption tax is also applicable heating oil and will be effective as of midnight on Monday.

On Monday morning motorists will see prices go down by one cent as the reduction in the VAT will kick in first.

The bill was tabled to replace a government proposal to reduce the defence tax on interest earned with a total cost to public finances estimated at €45 mln.

Meanwhile, DISY’s Neophytou tweeted: "As a government and parliament we can offer more to society.”

DIKO in a statement said: “The adoption of the proposed law will lead to the easing of the economic pressure exerted on the public by the increase in fuel prices, with a positive impact on all households”.