House Commerce Committee To Push For Lower VAT On Electricity Bills

The head of the House Commerce Committe Lefteris Christoforou plans to ask the VAT office and Cabinet of Ministers to approve a drop in VAT charged on electricity from 17 percent to five percent, he said in comments to state radio.

After getting the green light from the European Commission to apply for lower VAT rates on the essential service of electricity, Christoforou said that groups like the unemployed who cannot afford to pay their bills should get relief from the 15 percent VAT currently charged to all users.

Extra charges over and above the electricity consumption include 15 percent VAT, 2 percent for renewable energy, 2 percent for emissions fines, and a 7 percent temporary surcharge to cover extra costs incurred after the explosion next to the Vassiliko power plant. Each electricity bill includes an estimated 70 percent for actual electricity consumption and 30 percent in extra charges.

Cypriot consumers pay the highest electricity consumption charges in the EU, according to Eurostat's latest figures.

The state must put a hold on non-essential projects like luxury government buildings to save money and lower the VAT on electricity until the economic crisis has passed, said Christoforou.

The EAC is a cash cow for the state, as it is a de facto monopoly with no competition, so the population is forced to pay their bills even if they cannot afford them - or do without electricity.

Loud protests against electricity bills in the hundreds of euros have come from various citizens groups and been covered by media such as the UK's Telegraph, which carried an article about the electricity bill prices encountered by UK expatriates and local citizens. Greek-language media such as Sigma TV, Mega Channel and RIK have also covered the situation extensively, recording cases of two-person households receiving bills of 1,200 euros, and of children studying at night by candlelight because their parents are too afraid of the electricity bills.

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