Greece: VAT proposals to hurt shipping and tourism

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_25/06/2015_551525



VAT proposals to hurt shipping and tourism
Thursday June 25, 2015
By Ilias Bellos

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The creditors are asking for an increase in the tax on ships’ capacity that Greece-based shipmanagement companies pay and the gradual abolition of the provisions of the legislative framework according to which these firms operate.

That is a move which threatens to inflict a direct blow on a sector that contributes about 7 percent of the country’s gross domestic product, 192,000 jobs and foreign currency amounting to some 13.2 billion euros per year, according to data from the Foundation for Economic and Industrial Research, the Bank of Greece and the Boston Consulting Group.

The eurozone and the International Monetary Fund are also proposing an increase in the value-added tax rate on hotel accommodation from 6.5 to 23 percent while demanding a VAT hike on food service from 13 to 23 percent, to be introduced as early as July 1.

“If that is implemented, the result will be destructive, putting our tourism product completely out of competition, given that the average VAT rate at rival destinations ranges between 8 and 10 percent. For the umpteenth time, it has to be made clear that the decision of each visitor is doubtlessly affected by the cost and his choice is fully determined by that,” was the reaction of the Association of Hellenic Tourism Enterprises (SETE).