Filenews 30 December 2025 - by Eleftheria Paizanou
The obstacle of tax reform for the Government has been overcome, however the party interventions for further relief of households will continue into the new year.
Something that the MPs had previously announced during the discussion of the legislative tax package in the Plenary Session of the Parliament. In fact, some opposition parties believe that after the tax deductions with which the middle class will benefit, those taxpayers who are below the tax-free allowance of €22,000 should be supported with additional measures.
The party interventions concern the law proposals of AKEL, ELAM, the Ecologists and Alexandra Attalidou, which were discussed a few days ago in the Parliamentary Committee on Finance and decided to be put before it in the new year.
These are the AKEL law proposals, which provide for a reduction to 5% of VAT for the provision of electricity services, for the renovation and repair of private homes, which includes works to expand the main residence, energy upgrade of homes, as well as the application of zero VAT on certain basic necessities.
In addition, these are the proposals for taxing the excess profits of banks and RES companies, also from AKEL. The last issue is the subject of intense confrontations between DISY and DIKO MPs with those of AKEL.
ELAM seeks to expand the tax neutrality framework for restructurings of non-performing loans, regardless of whether they were granted before December 31, 2015, as is currently the case. It also proposes the introduction of the condition that the initial disbursement of the grant must have taken place at least three years before the restructuring agreement and maintain the safeguards to prevent abusive practices. This regulation was implemented until 2017 with positive results and according to ELAM it should be reinstated, as it contributes substantially to the acceleration of restructurings, the reduction of non-performing loans, the facilitation of sustainable solutions for borrowers (natural and legal persons), the protection of primary residences and small business premises, as well as the strengthening of social cohesion and financial stability. In addition, the legislative regulation proposed by the Ecologists calls for the application of 5% VAT on the delivery and installation of solar panels on and next to private homes, residences and other public and non-public buildings, which are used for activities of public interest. Finally, Ms. Attalidou proposes zero VAT on basic necessities.
Until the end of '26 the government measures
The Ministry of Finance has already taken a negative position on the law proposals, pointing out that the regulations related to the reduced VAT are implemented by the Government. This is, as it has been said, the promotion of economic policy to address challenges, such as inflation.
In 2026, it will spend an amount of €67 million for this purpose, while it plans other measures of €6.7 million to address energy costs. According to data from the Ministry of Finance, the targeted staggered subsidy of the electricity consumption charging price for the special residential tariff for specific categories of vulnerable consumers (Code 08) and the bimonthly tariff for commercial use of single low voltage input (Code 10) will continue only for the Pricing from 1/1/2026 -31/12/2026.
For another year, the application of the zero VAT rate to certain products will continue from 1/1/2026 – 31/12/2026. At the same time, in April 2026, the reduction of the VAT rate on electricity for domestic use from 19% to 9% will be renewed until December of the same year.
