Value-Added-Tax-nado: Greeks Face Soaring Food & Tourism Costs

Via KeepTalkingGreece.com,

More than 40,000 food items are been sold with a poisonous 10% Value Added Tax hike as of today and expect to burden the average Greek household with at least 55 euro per month. Beef, coffee, tea, cocoa, spices, sugar, oils – except olive oil, ice-creams, chocolates, but also condoms and tampons, some articles for people with disabilities, transport, taxi… just pick up an item and name it cost 10% more as of Monday 20th July 2015.

The absurd VAT hikes amid recession and economic crisis come into effect with an express implementation of  Greece’s creditors “prior actions” that the coalition government and three opposition parties voted in favor on last Wednesday. In fact, the VAT hikes from 13% to 23% were supposed to go into effect already on Friday, that is less than 48 hours after the voting. But the Greek Finance Ministry decided to give it a two-day extension to allow the market to adjust.

crazy-cartoon

Especially in food items the VAT hikes cause ridiculous examples as in the past, when the Troika insisting on VAT hikes:

Beef 23% but chicken, pork 13%

1 kilo of minced meat: 13% if consists of 60% pork and 40% of beef. But 23% if it consists of 60% beef & 40% pork.

1 scewer of souvlaki with pork: 13%. But if pepper & tomatoes are added 23% despite the fact that the veggies run on 13%.

The same is valid for burgers of pork and chicken or turkey.

Chicken has 13% but it goes up to 23% if it is stuffed with feta cheese or is sold in form of pre-made schnitzel with breaded crust cover.

Plain past is 13% but stuffed pasta like tortellini is 23%

Bread and bread products: 13% if plain, but 23% if they contain sesame cover, or stuffed with raisins and cheese.

The general VAT idea for food items is: 13% for staple food: fruits, vegetables, flours, olive oil, dairy products (milk, yoghurt), salt, fish, bread, water. But 23% for mainly imported goods like beef, and food processed products.

Other VAT hikes to 23% include:

transport tickets (as of autumn 2015) and taxi (as of July 20th), restaurants, foreign language schools.

Minimum taxi fare charge is as of today: €3.44 from €3.20 until yesterday Sunday. Taxi fares from and to Airports will rise accordingly.

Hotel accommodation to rise from 6.5% to 13% as of October 2015.

The 30% taxation reduction for the islands will be scrapped as of autumn, but there will be a new taxation scheme for certain islands categories whether with high tourism or not.

VAT at 13% remains also for utility bills and fuel.

VAT for medicines and vaccines, newspapers, books and theater tickets is now lower from 6.5% down to 6%

The total annual extra burden for the households is expected to be 650 million euro.

Conclusion:

Has Greece now achieved the much praised competitiveness with the VAT hikes? Of course, not.

 

First of all, the VAT hikes have a pure revenues increasing target. They will hit the poor as indirect taxes increase is an unjust measure. The 55 euro more that they will be called to pay each and every month is money they simply do not have.

 

And second, the hikes in restaurants and hotel accommodation will exterminate Greece’s competitiveness in tourism. I suppose, certain tourism companies were sour to see tourists flocking to Greece like crazy last year, while they were deleting other destinations around the Mediterranean basin.

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P.S. Thank God, they did not decide to impose the V.A.T. hikes retroactive and ask us to go back to the supermarkets and pay additional 10% for the one package of tortellini we bought in March, coffee & tea and several kilos of sugar since beginning of the year. 

VAT hikes in detail are here (in Greek)