The state’s new €60 million package of targeted support measures- The decisions for businesses

The new package of targeted support measures for households and businesses has been announced by the President of the Republic, Nikos Christodoulides.

The new package exceeds €60 million without taking into account the amount of support from the Central Agency for Equal Distribution of Burdens which was also announced. The support falls within the state’s budgetary abilities and will be carried out within the stable development course of the Cypriot economy.

Announcing the measures, President Christodoulides reiterated that the Government's actions are driven by strengthening the social protection network for the vulnerable and supporting the middle class.

As far as businesses are concerned, for additional relief, but also to support them, the annual company fee of €350 imposed in 2011 has been abolished. Also, the beneficiaries of the Loan Plan for professional activity of new entrepreneurs have been expanded.

The new package of targeted support measures concerns the following:

1. Extension of the graduated electricity cost subsidy measure from March 1 to April 30, 2024, for residential, commercial and industrial consumers, while for vulnerable consumers the subsidy will cover 100% of the electricity price increase.
2. Extension of the measure to reduce consumption tax on motor fuels until 31 March, 2024.
3. One-off support to households receiving relevant benefits from the Deputy Ministry of Social Welfare based on income criteria. More specifically:

A. One-off support for each child, with a maximum amount of 250 euros, in single-parent families. Families with more than 4 dependent children will receive an additional amount.

B. One-off support for each child, with a maximum amount of 250 euros for families. Families with more than 4 dependent children will receive an additional amount.

C. Households that receive a Minimum Guaranteed Income and are not included in the aforementioned categories, will receive a corresponding lump sum.

More than 27,000 families will benefit from these measures.

1. To support large families and taking into account the great interest that has been shown in the purchase of electric cars through the sponsorship program that has been announced recently, the relevant budget has been increased by €2 million.
2. For refugees in particular, there is an expansion of the beneficiaries, as well as an increase in the amounts in relation to the schemes offered by the Central Agency for Equal Distribution of Burdens. More specifically:

A. Increase of the mortgage subsidy from €130,000 to €200,000 and the subsidy period from 20 to 30 years with the abolition of income criteria.

B. Subsidy increase from €50,000 to €100,000 for repairs to homes without income criteria.

C. Increasing the subsidy for students with the inclusion of their day to day costs, in addition to tuition fees, while at the same time the amount of any scholarship will not be deducted from the amount of the student loan, as has been the case until now.

D. New lending plans concerning the renovation of homes, the purchase of household appliances and the energy upgrade of existing homes, without income criteria.

E. Expansion of beneficiaries of the Loan Scheme for Young Entrepreneurs Fund

F. For property in the occupied territories, which was used for a loan, which has subsequently been repaid, it will now be possible to use it again in a related application to the Central Agency for Equal Distribution of Burdens.

G. Loan or interest rate subsidy plans granted by the Agency will no longer be taken into account.

H. Applications for Mortgage Loans will not take into account whether the applicants own another home, unless they have been previously approved by the Agency for that home.

1. For additional relief but also to support businesses, there will be the abolition of the annual company fee of €350 imposed in 2011.
2. At the same time, it is recalled that the reduced or even zero VAT rate on basic necessities will continue to be in effect until the end of May.

The new set of measures follow the package announced on October 2023, with a fiscal impact of €196 million, which apart from support for high electricity bills and the reduction of excises duties for fuel, also included a zero VAT tax rate for basic goods, increased allowances for the vulnerable, as well medium-term measures for alleviating the cost of energy and accessible housing.

“In October 2023 we announced a €196-million package. The new package of targeted measures I announced today exceeds €60 million, without taking into account the support of the Central Agency for the Equal Distribution of Burdens, is within our fiscal capability and is based on Cyprus’ steadfast growth trajectory,” the President said in a televised message, after the Council of Ministers meeting.

“All of the aforementioned, were made possible due to our responsible fiscal policy and our unwavering focus in the creation of conditions for sustainable growth, which enables us to exercise social policy aiming to improve the every-day life of the citizens and the competitiveness of our businesses, the President concluded.

(Source: InBusinessNews/CNA)