Cyprus reports price reduction following zero VAT policy

The Cyprus Consumer Protection Service has reported a 5% average decrease in retail prices for essential goods following the implementation of a zero VAT policy. The measure, which covers bread, milk, coffee, sugar, and baby food, officially took effect on October 12, 2026, and is scheduled to remain in force until May 31, 2027.

The findings were based on market monitoring conducted by the Consumer Protection Service through field audits at major supermarkets and data collection via the e-kalathi electronic platform. Authorities stated that the policy is being widely applied, with the majority of sampled products reflecting the intended price reduction compared to pre-implementation levels. The Service clarified that the results are based on a representative sample and do not encompass the entirety of products available in retail outlets.

This initiative is part of an ongoing government effort to curb inflationary pressures on household staples. The Consumer Protection Service continues its monitoring process to ensure compliance across the market. No further changes to the policy timeframe have been announced as the government continues to assess the impact of these tax relief measures.