Finance Minister Makkis Keravnos has announced new measures aimed at vulnerable groups and the middle class, particularly benefiting young couples. These measures, following a meeting with President Nikos Christodoulides at the Presidential Palace, include products that will be sold with zero VAT.

Specifically, products such as baby diapers, adult diapers, baby formula, women’s hygiene products, as well as fruits and vegetables, will now be subject to zero VAT indefinitely.

Keravnos stated, “We believe that these products mainly affect young couples and the middle class, and with the current economic developments, it’s the right time to reintroduce these products under the zero VAT category.”

The minister emphasized that the government’s economic policy is designed not only to ensure financial stability but also to strengthen the middle class and vulnerable segments of the population. He cited recent data showing that the middle class has grown from 58.6% in 2015 to 64.1%, largely due to current policies.

During the briefing, Keravnos also discussed the upcoming tax reform, expected to be completed by mid-2026. The reform will address multiple legislative frameworks, aligning with EU regulations and modernizing Cyprus' tax system. Some measures will be announced gradually before 2026 as part of this ongoing process.

Keravnos noted that the government remains committed to social benefits and income support measures, with a €2 billion allocation for social programs in the 2025 budget. He also dismissed claims that the government’s decision to reintroduce zero VAT was a reaction to public pressure, asserting that economic indicators now allow for these measures.