Zero VAT implementation results in 5 percent price reduction in Cyprus

On October 12, 2026, the Cyprus Consumer Protection Service implemented a zero VAT policy on five essential product categories: bread, milk, coffee, sugar, and baby food. This initiative, designed to alleviate the cost of living, will remain in effect until May 31, 2027.

Monitoring conducted by the Consumer Protection Service, utilizing both in-store checks at large supermarkets and data from the e-kalathi platform, indicates that retail prices for the surveyed items have declined by approximately 5 percent. The authority noted that these findings are based on a representative sample of selected products rather than the entire market inventory.

Government officials cautioned that the zero VAT status does not guarantee future price stability. External market forces, including raw material costs, production expenses, transportation fees, and competitive dynamics, continue to influence price fluctuations. The Consumer Protection Service confirmed that it will continue to monitor the market to ensure compliance and track ongoing price developments.