Rumored VAT Hike Troubles Tourism Sector

Greek tourism professionals unanimously agreed last month that a potential increase of the VAT rate on tourism services would be “disastrous” for the sector.

According to the Hellenic Federation of Hoteliers, the government is considering either to apply a common VAT rate of 15-18 percent, or increase the existing rate (11 percent) by 1-2 percent.

During the summer various scenarios and rumors were heard in regards to government plans to proceed with yet another VAT rate hike.

“Such a decision is clearly suicidal and it would certainly be the final blow to tourism and Greece’s economy,” the federation said in a statement.

The federation stressed that the result would be the loss of billions of euros and the complete repression of any tourism development along with thousands of job losses.

The federation said that Greece’s competition offers a hotel package (breakfast/half board, full board and all inclusive services) with a much lower VAT (three to six percent lower) and tourists would simply choose to vacation at those countries.

The Pan-Hellenic Federation of Tourism Enterprises (GEPOET) said in a press release that the government simply has “worsened the situation for Greek tourism as it increased the VAT twice within six months on accommodation and tourist transport services.”

GEPOET also underlined the problem tour buses are facing as the government raised the tax on fuel by 36 percent this year.