Filenews 21 May 2025 - by Eleftheria Paizanou
Brussels does not seem to be taking a positive view of the postponement of the implementation of the green tax on fuel, known as the carbon tax, despite the steps and representations made by the Cypriot authorities.
The Commission, according to information from "F", sent an unofficial message to the Republic that the green tax cannot be suspended and the amount of €50 to €60 million would be deducted that the country would receive from the Recovery Fund.
At the same time, the European Commission (EU) seems to be positively considering the possible request of the Cypriot side to reduce the green tax on fuel by 50%. The same practice is expected to apply to the landfill tax, which is also included in the commitments of the Recovery Fund.
Therefore, with these data, in the next few weeks there is expected to be an increase of 3 to 4 cents per liter in the price of fuel, while in the waste landfill tax the annual cost for households is estimated at around €22.
As "F" is informed, the Ministry of Finance is preparing a relevant bill for the imposition of the reduced green tax on fuel for a period of one and a half years.
The Treasury's original plan was for the carbon tax to be between 6 and 8 cents per litre, however with the change being promoted, the green tax will be between 3 and 4 cents per litre for 2025.
The relevant bill is expected to be approved by the Council of Ministers in its next sessions, so that it can be submitted to the Parliament in June. What the technocrats of the Ministry of Finance are still considering is the amount of the green tax for 2026.
The original plan was for the increase to be another 10 cents per litre. If the 50% reduction finally applies, then next year the green fee will be in the order of 5 cents. That is, by the end of 2026, the cost of motor fuels will increase by 8 to 9 cents per liter.
Will be deducted from the 2027 increase
It is worth noting that in 2027 the European pollutant market system will be implemented throughout Europe. That is, all member states will pay a carbon tax, raising the cost of motor fuels to 18 to 20 cents per litre.
However, the Cypriot authorities, after consultations with the EU, agreed to remove in 2027, the green tax that will be imposed on Cyprus in 2025 and 2026. Therefore, in 2027, the green fee of 8-9 cents per liter that taxpayers in our country will be required to pay in the next year and a half will be deducted from the carbon tax,
In 2027, the cost of increasing fuel is estimated at around 10 to 12 cents per liter.
It is reminded that the state, along with the implementation of the green tax, will also announce compensatory measures regarding subsidies for vulnerable groups of the population as well as plans to replace cars.
€22 per year the waste tax for households
In relation to the landfill tax, the government's initial proposal was €35 per tonne until 2028, which would increase by €5 per tonne every year. During the consultations that took place, the Cypriot authorities have diversified their proposal, reducing the landfill tax to €10 per tonne.
With these data, it is estimated that each household will be burdened with €22 per year, i.e., the burden will be around €1.70 per month.
In addition, the green water tax has been approved, which will be €0.01/cubic meter.
Finally, in 2026, it is estimated that the overnight tax of €2.50 per night will be applied to hotels (not included in the commitments in the Recovery Fund).
