Government of Cyprus

On 25 March 2026, the Council of Ministers of Cyprus approved a new €100 million package to protect households, businesses, and key sectors from the economic fallout of the war against Iran. This comes on top of the previous €100 million already allocated to manage rising costs due to the COVID pandemic and the war in Ukraine.

The new measures include;

• VAT on electricity will drop to 5% for all households from May 2026 to March 2027.
• Electricity subsidies will be expanded to include low income pensioners and single parent families.
• Fuel excise duty will fall by 8.33 cents per litre for April to June 2026, pending parliamentary approval.
• The planned green fuel tax will be scrapped, though this will cost Cyprus €23 million in EU funds because of non-compliance.
• Meat, poultry, and fish will be at a 0% VAT from April to September 2026, in addition to fruit and vegetables that are already exempt.
• The state will cover 30% of wages for staff in hotels and tourist accommodation operating in April 2026. Around 19,000 workers are expected to benefit.
• A separate scheme will be implemented to support airlines in maintaining flight routes to key markets.
• Two short term subsidy schemes with a registration deadline of 31 May will cover 15% of fertiliser and input costs in April and May. Around 3,000 farmers are expected to qualify.

The measures were announced by President Nikos Christodoulides, who stated that “As we took all necessary measures and used every available tool to ensure the security of the country and its citizens, we are doing the same concerning the substantial support of society, citizens, and businesses.”