The Consumer Protection Service of the Ministry of Trade, Energy and Industry recorded at the beginning of September that the prices of 75% of the products included in the zero VAT list were kept at exactly the same levels as the date of application of the measure on May 5, the Director of the Service said on Saturday , Konstantinos Karagiorgis.
In his statements on the occasion of publications regarding the policy of the Government, specifically of the Ministry of Finance and the Ministry of Trade regarding the zero VAT rate, Mr. Karagiorgis expressed his regret, as, as he said, they do not correspond in any way to reality.
As he said, the zero VAT rate was implemented for a specific period of time precisely to help households accurately and contain prices on basic consumer goods so that they can respond to the difficult times the economy is going through.
The Ministry of Commerce and Consumer Service recorded on May 3, two days before the implementation of the measure, the prices of the products included in the VAT list, a total of 65 products on a sample basis from 58 points throughout Cyprus, continued the head of the service, adding that the zero rate VAT policy was implemented on May 5 by decree of the Minister of Finance and since then the prices of 65 products out of 58 points have been recorded every 10 days, in order to evaluate the correct implementation and success of the measure.
“The recording made on September 1 showed that in a percentage of 75% of the products included in the list of zero VAT, the prices have been kept at exactly the same levels as the date of application of the measure (May 5)”, noted Mr. Karagiorgis, adding that this is a very high percentage, which demonstrates the success of the measure and the right decision to extend it for another six months, as it has a positive reflection on the wallet of consumers, especially those with small children.
He also pointed out that although there have been serious increases in the food supply chain across Europe in recent months, to their credit supermarkets have held down prices on specific products following the implementation of the measure, and despite pressure for price increases, as they have not they wanted to give reason to the world that this measure is being exploited.
He added that the Government and the Ministries that draw up the policy to support consumers study daily support measures and will continue to do so, adding that they will not they continued to apply a measure if it did not have a serious and positive impact.
“In this context, the Ministry and the Consumer Protection Service will continue to examine the measures. Already, e-kalathi is being discussed next week, the implementation of which we believe will significantly contribute to transparency and the ability to compare prices, as well as the ability for consumers to choose the cheapest products according to their financial capacity.” noted.
Mr. Karagiorgis said that he has also started a consultation on the introduction of a ceiling on the price of water in places where competition does not work, while other measures are also being studied with the aim of supporting consumers in practice, as he said, and he argued that publications which are not reported with correct data at correct time periods only cause damage.
Asked if the rate of price containment meets the initial objectives of the Ministry, Mr. Karagiorgis stated that he was very pleased as, as he said, the rate of 75% constitutes a very high performance, if it is also taken into account that Cyprus, despite importing the most products, has kept inflation in the category of food and non-alcoholic beverages at very satisfactory levels compared to the other countries of the European Union, where it ranges around 10%.
To a question about the cost of zero VAT measures , said that in combination with the addition of the two new products that will enter the list from November 1, the burden on the state will reach 13 million euros.
Asked to comment on the criticism made by political forces that the measures did not give the “breath” that consumers expected, Mr. Karagiorgis said that with the removal of VAT there was an immediate reduction in product prices from 5% to 19 %, while he characterized the containment of prices at May levels as a very important measure with a huge benefit for consumers, since the list included very basic products.
“The zero VAT rate was just one of the measures being discussed and taken to provide relief to households. We believe that this measure is working correctly and as a competent agency we will continue to monitor whether it is applied correctly, whether there are fluctuations in prices and we will inform the public about this specific policy”, he added.
When asked if announcements and new measures are expected in the near future, he replied that in the last six months a total of three policies have been implemented, adding that within a short period of time the zero VAT rate along with the water cap and e-kalathi will help consumers a lot .
He added that the e-kalathi bill will be tabled in its original form and said he was very optimistic that it would have a positive outcome during its upcoming article-by-article debate in the Parliament, following the consultations held against during the summer with the Competition Commission and political parties, during which the Ministry explained the aim and purpose of the measure.
Asked if there might be a ceiling on products other than water, Mr. Karagiorgis said that the legislation provides the possibility for the Minister through a decree to include other products, adding that in the first phase the Ministry focused on the most necessary good, water, in order to avoid the phenomenon of profiteering in areas where competition does not work, and adding that in at a later stage, when and if this policy is passed, it will be assessed whether it can be extended to other products.