The Value Added Tax (VAT) Law was approved by the Plenary of the House of Representatives with 46 votes in favor and one abstention. This law aims to harmonize with European Directive 2022/542, which introduces new VAT regulations and allows greater flexibility in VAT rates for member states.

The directive provides member states with the flexibility to determine their own VAT rates, ensuring equal treatment among them and aligning their priorities with the EU's green and digital transition, as well as public health protection.

Under the new rules, member states can apply up to two reduced VAT rates, with a minimum threshold of 5%, for the supply of goods and services at a maximum of twenty-four (24) out of the twenty-nine (29) points listed in Annex II of Directive 2006/112/EC.

Furthermore, exceptions are granted for VAT rates already implemented by other member states, which are included in a list published by the European Commission. However, the overall structure of VAT rates remains intact, with two rates between 5% and 15%, one rate below 5%, and one zero-rate VAT.

In addition, the House of Representatives has approved a supplementary state budget amounting to €361 million.

This supplementary budget follows the approval of an earlier supplementary budget of €75 million in April. The fiscal burden of the new budget represents 0.85% of the Gross Domestic Product (GDP), including intra-governmental transactions totaling €116 million.

The major expenses included in the budget cover various areas. For instance, €60 million is allocated for social welfare allowances in the second half of 2023, €60 million for co-financed Projects/Grant Schemes, €59 million for water purchases due to increased costs of desalinated water, primarily caused by rising electricity prices. Additionally, €56 million is designated as a government grant to the University of Cyprus, covering both development projects (€42.6 million) and operational expenses (€13.4 million). Moreover, €25.4 million is allocated for the purchase of the Metropolitan building to accommodate the Ministry of Labour and Social Insurance.

Other allocations in the budget include €18.2 million for extending the electricity consumption subsidy, €15.8 million as a government grant to TEPAK for the construction of student housing facilities, €15.6 million for hosting displaced individuals from Ukraine and unaccompanied minors.

During the session, concerns were raised about the lack of parking spaces for a ministry located in the center of Nicosia, which employs 260 individuals. Similar concerns were expressed during the session of the Committee on Finance, which reviewed the supplementary budget.

Finally, the Plenary of the House of Representatives will discuss foreclosures today, as announced by the House President, Annita Demetriou, during the last session before the summer recess.

Furthermore, some political parties have requested a postponement of the discussion on two bills and one government draft law. One of these bills, co-signed by AKEL, DIPA, EDEK, the Greens, and three MPs from DIKO, aims to grant borrowers the right to appeal to the Court in order to secure an interim injunction against scheduled foreclosures. This would allow the examination of potential abusive clauses and over-indebtedness. The second proposal, put forward by the President of EDEK, focuses on property foreclosures at the estimated value at the time of entering into a loan agreement.