Duties set to rocket with EU membership

CONSUMER taxes on petroleum products, alcohol, cigarettes and cars are set to rocket after a new fiscal reform approved by the Cabinet as part of the government’s EU harmonisation commitments Phileleftheros reported yesterday.

The new tax package is expected to be brought before the House Finance Committee on Friday, despite strong resistance earlier this month from opposition DISY deputies Lefteris Christoforou, Maria Kyriacou and Zacharias Zachariou.

The deputies submitted a proposal to cut the heavy tax on cars, citing long-term benefits, such as wiping out tax evasion, saving fuel, reducing pollution and improving road safety.

But with the new tax consumers could face increased duties of up to 135 per cent on cars with an engine capacity over 2.5 litres.

Cars in Cyprus are, on average, 42 per cent more expensive than the average car price in the EU, making Cyprus’ car market one of the most expensive within the bloc.

According to the proposed reforms, consumer tax on petroleum products will rise by three cents per litre on diesel and kerosene, 7.5 cents per kilogram on mazut oil and 5.8 cents per kilogram on hydrogen and methane.

As for alcohol, locally produced spirits will have added duties of £2 per litre of pure alcohol. Imported spirits will have increased duties of £2.70 per litre of pure alcohol. Duties on local and imported wines will remain the same, while duties on beer are expected to increase.

Duties on cigarettes will be reduced to the same as those imposed in the EU (from 67 euros per 1,000 cigarettes to 60 euros per 1,000 cigarettes).
Cigar duties will be unaffected, hand-rolled tobacco duties will increase will increase by 32 per cent, and other tobacco products are expected to increase by 20 per cent on the cost price.

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