While creditors have asked for a raise on value added tax on Greek islands, neighboring Turkey is about to create duty free zones on tourist destinations on the Aegean Sea coastline.
As of October first, six popular tourist islands have lost the benefit of reduced VAT with more to follow. Aegean Sea islands had the privilege of a 30 percent VAT reduction. The Greek government has abolished this privilege as part of the reforms required by the country’s third bailout program.
However, on the other side of the Aegean, Turkey’s Economy Minister Nihat Zeybekci is examining the creation of duty-free zones on popular tourist destinations that are across competing Greek islands.
According to Turkish media, the economy ministry is jointly working with the Tourism and Forest & Water Management ministries examining the creation of a zero tax regime at marinas, hotels, entertainment venues, shops, restaurants and other businesses, with a primary focus on attracting vacationers interested in cruising and yachting.
The focus is on coastal destinations opposite the Greek islands of Rhodes, Kos, Chios and Samos. Namely, Cesme, across from Chios, Didim, across from Samos, Bodrum, opposite Kos, and Marmari, across from Rhodes, along with other areas west of Antalya. In these destinations, foreign tourists will pay no taxes on tourist-related businesses.
Zeybekci said the tax-free areas will contribute greatly to the competitiveness of Turkey’s tourism in the Mediterranean and the Aegean. At the same time, the Turkish government will invite private investors to bid for management and operation rights of tourism related businesses.
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