Zero VAT impacts prices of consumer goods in past month

While the prices of basic consumer goods have generally sharply increased in the past year, some have started to decrease in the past month, according to the latest report by the Consumer Protection Service’s basic consumer goods price observatory.

More specifically, the report showed that prices increased for 38 out of 45 categories of food and household items in the past year, at the same time observing marginal decreases in 29 of these categories in the past month.

The most significant price hikes were seen in the prices of frozen fish (61.5 per cent), vegetables (52.7 per cent) and sugar (38 per cent), while smaller increases were marked in the prices of evaporated milk, frozen and fresh meat, instant and ground coffee and laundry detergent.

Although in June 2023 the VAT on eggs, milk and baby food was at zero, their prices have increased, the service said but added that at the same time, the price of baby diapers, which were also included in the list of zero-VAT goods, fell slightly.

The report also said that between May and June 2023, small decreases were seen in 29 categories, the most significant being a 9 per cent decrease in the price of gas cylinders, and 6 per cent for oil.

Year on year, the price of fabric softeners and toilet paper increased, but marked a slight decrease in this period.

Other goods that now cost marginally less are pulses, rice and pasta, sugar and flour, baby formula and sanitary towels.

However, prices for vegetables, tomato juice, eggs and baby food continued to soar, the report said.

The consumer protection service stressed that intensive checks continue regarding the implementation of the zero VAT measure, recording the prices of 65 products in nine different supermarkets and 58 points of sale throughout Cyprus.

“After the last recording on July 6, 2023, it was found that the measure is being implemented with a significant benefit for consumers since more than 80 per cent of the products included saw price reductions equal to or even greater than the rate,” the service said.

Finally it urged consumers to do substantial market research before proceeding with purchases, taking into account the results of the specific observatory.