Tourism Professionals Fear VAT Hike Rumors

“Any decision that affects the viability and prospects of Greek tourism with low benefits is economic suicide, not fiscal policy,” the Hellenic Chamber of Hotels said last month.

The chamber said that, according to rumors, the Economy Ministry is planning a VAT hike on tourism services, currently taxed at the 11 percent rate, to the higher 23 percent rate.

“A 12 percent VAT increase on hotel services would automatically eliminate the Greek tourism product from the market with disastrous consequences for the economy,” the chamber said.

The Hellenic Association of Travel and Tourist Agencies (HATTA) underlined that the cost of tourist packages, which include costs for coaches and hotels, would increase to such a level and exclude Greece from the competition since major competitors in the Eurozone receive a more favorable tax treatment.

Greece’s rival destinations maintain low VAT rates on tourism services, such as France (5.5 percent), Portugal (five percent), Spain (seven percent), Turkey (eight percent) and Germany (seven percent).

In an announcement, Hellenic Federation of Hoteliers President Andreas Andreadis called for a reduction of VAT on tourism services (as well as a reduction to the spatosimo tax at airports).

“This would lead to an impressive increase of tourism flow and revenues,” he said.