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Counterproposal Of VAT Rate Reduction

The state would lose revenue from the increase of VAT rate by 10% in food services (23% from 13%), according to tourist entrepreneurs in Greece.
The reason is simple, as it would reduce sharply the tax base. Consumers are expected to reduce the spending, therefore the collection of taxes would be decreased.
The president of Greek Hoteliers John Retsos noted that this measure won’t deliver the anticipated revenue, but it would cause new pressures on tourism.
He said that tourism association in Greece will submit a comprehensive plan to Greek FinMin Evangelos Venizelos to reduce VAT rates in food services. He also stressed that VAT rate in food services should be reduced instead of increased, as it happens with the VAT rate on accommodation (6.5%), which helped attract more tourists.
Additionally, the confederation of professionals, craftsmen and merchants (GSEVEE) characterizes the increase of VAT rate as “a suicide option” and speaks of mistakes, which unless they are put right, would lead to lower revenue for both enterprises and the Greek state.
This measure has to do with 140,000 enterprises, which employ over 600,000 employees, most of them young.
It is estimated that the measure would lead to thousand of business closings, while the tourist product would become among the most expensive in Europe.
(source: capital)

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