Published by Global Banking & Finance Review®
Posted on March 26, 2026
2 min readLast updated: March 26, 2026
Add as preferred source on GoogleCyprus is launching a suite of relief measures starting April to ease cost pressures from the U.S.–Israel–Iran war. These include slashing VAT on household electricity to 5% until March 2027, reducing fuel taxes, and subsidizing tourism wages by up to 30% in April. The steps address energy price sur
NICOSIA, March 26 (Reuters) - Cyprus will further cut value-added tax on electricity bills, reduce fuel taxes and subsidise salaries in the key tourism industry to help people cope with cost increases due to the U.S.-Israeli war on Iran, President Nikos Christodoulides said on Thursday.
Cyprus, the European Union country closest to the Middle East, has seen a slowdown in tourism bookings as the conflict affecting the region raises security concerns among travellers, after a British base on the island was hit by a drone on March 2.
Christodoulides said the measures will take effect in April and May and will have varying durations.
The measure to subsidise salaries in the tourism sector by up to 30% applies for April 2026, while a VAT reduction to 5% on household electricity bills will apply until March 2027, he said. The VAT rate on electricity has already been slashed to 9% from 19%, due to the energy crisis caused by the war in the Middle East.
(Reporting by Michele Kambas, Writing by Edward McAllister, editing by Andrei Khalip)
Cyprus will cut VAT on electricity bills, reduce fuel taxes, and subsidise tourism sector salaries to ease cost increases caused by the Iran war.
The electricity VAT will be reduced to 5% for households until March 2027.
The salary subsidy of up to 30% applies for April 2026 in the key tourism sector.
The measures aim to help people cope with cost increases and reduced tourism bookings due to the US-Israeli war on Iran.
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