Filenews 7 February 2024 - by Eleftheria Paizanou
The Ministry of Finance is examining the fiscal impact on the state's finances of a possible continuation of the support measures against high prices. This is because the state will lose revenue if the reduction of excise duty on motor and heating fuels as well as the subsidy for electricity continues for a few more months. Since the last renewal of the three measures, the state had/will have lost tax revenues of approximately €72 million.
Technocrats from the relevant ministry, in addition to the fiscal impact aspect, are examining whether fuel prices have risen to an extent that justifies continued financial support. The evaluation of the measures follows instructions given by the President of the Republic to the Minister of Finance.
It is reminded that the electricity subsidy expires at the end of the month, the reduction of the consumption tax on motor fuels expires on March 3 and the reduction of the consumption tax on heating oil at the end of March.
In addition, VAT on various categories of products expires at the end of May. Yesterday, Government Spokesman Konstantinos Letympiotis said decisions would be taken before the measures expired.
Regarding the increase in the price of electricity, the spokesman said that the aim of the country's energy program is to provide citizens with cheap electricity.
Yesterday afternoon, the Minister of Energy met with the Board of Directors of EAC, with whom they also discussed the possibility of increasing the price of electricity. However, for this year EAC submitted a request to CERA for a 6% increase in the price of electricity, while for last year it asked for a 25% increase, a proposal which was rejected by the Regulatory Authority, for this matter was taken to court.
The bill is ready
It is reminded that increases in electricity prices will also occur with the increase in the auctioning of pollutants and green taxation. For the latter, the Ministry of Finance has prepared a bill which since last December has been in the Legal Service for legislative scrutiny and is expected to be submitted to Parliament in March. In addition, the public consultation on the regulations on the environmental charge is expected to be completed and the dialogue on the waste charge will be launched.
The instruments began
However, the new increases in electricity prices have alarmed the parties. DISY, in a statement, stresses the need for Cyprus to plan much more ambitiously towards the effort for the energy transition in RES, as well as in energy saving investments.
For its part, AKEL reiterates the issue of taxing the superprofits of energy companies, calling on the Government to promote it.
In addition, it calls on the Government to continue subsidizing electricity and at the same time to take other compensatory measures. MP Marinos Mousioutas noted that during the meeting the party will have with the President of the Republic they will demand that the electricity subsidy continues.
