OEB requests the reduction of the VAT on electricity to 5% for the next three months in a letter to the Minister of Finance, Konstantinos Petridis.
OEB in its letter emphasizes that the wave of price increases that has erupted in Cyprus exerts serious pressure on both households and businesses.
"A key component of price increases," he said, "is the increase in the cost of electricity, which cuts off all economic activity horizontally." Σin our country the pressure arises not only from the increase of the raw material with which the electricity is produced but also from the cost of the pollutants, which cumulatively is expected to increase the next bills by about 20% compared to the previous period. The only relief application, even if it is temporary, is the horizontal and universal reduction of VAT on electricity bills to 5% for the next three months ", notes OEB.
This, in addition to the absorption by companies of part of the dramatic increase in the cost of transport and raw materials, will make it possible to contain the wave of increases in final products, goods and services which would otherwise be passed on to consumer.
""We are confident that part of the loss of government revenue from the proposed reduction in VAT will be offset by maintaining significant levels of consumption, which under precise conditions will obviously be compressed by a corresponding squeeze in public revenue," the letter concludes.
politis.com.cy