Business brisk despite VAT hike

IT WAS business as usual for both shopkeepers and consumers on Nicosia=s Ledra Street yesterday, the first day of the new rate of VAT, bumped up from eight to ten per cent.

Prices at most shops remained the same, and while most owners said they would have to be raised in the near future, they were in no hurry to do so.

One exception was the Greek-owned Goody=s fast food chain, where as of yesterday, a club sandwich will now cost ,2.25 instead of ,2.15. Many other items on the menu remain the same price, however.

The Sunday Mail did not notice any changes at kebab and sandwich shops where the typical response was that the owners would change prices eventually, but could not say when.

One jewellery store owner explained that since their business usually involves selling expensive items at a substantial discount, these initial tax hikes should not effect business much at all.

Shopkeepers at a nearby pharmacy were also unconcerned, since VAT does not apply to drugs and they were postponing indefinitely the repricing of cosmetics, perfumes and other taxed items.

Costas Archontides, a fashion retailer himself out shopping yesterday, said that price adjustments in his industry would not be made until the autumn fashion season, and he was not overly worried about the tax cutting into profits.

Although business remains brisk for now, shoppers and retailers will have to keep their guard up for further price hikes, with the government determined to raise the rate of Value Added Tax to around 15%, the average level in European Union member states.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.