Trade union Isotita has called on Finance Minister Makis Keravnos to reduce taxation on fuel, in a strongly worded open letter sent on Thursday.
They said fuel is a “major expense” for households as it is used for both transportation and heating, and that high fuel prices reduce households’ disposable income.
In addition, they said, a fuel tax cut would help boost businesses’ competitiveness and allow them to offer better prices to consumers.
They also claim that it would boost tourism as tourists would have access to cheaper travel, making Cyprus a more attractive destination.
They added that it would help “contain” inflation and enhance social justice, as high fuel prices disproportionately impact low-income households, which spend a greater share of their income on fuel.
They also claim that the speed of urbanisation in Cyprus would be decreased by such a tax cut, as the high cost of transporting oneself from villages into larger towns for work is one of the key drivers of people moving out of the countryside.
Finally, they said high fuel prices were incentivising people to buy fuel in the north, which in turn “reduces tax revenues for the Republic of Cyprus” and “undermines security and stability” on the island.