“Selective” VAT Cut To 6.5% Causes Mixed Reactions

The Hellenic Association of Travel and Tourist Agencies (HATTA) last month welcomed the news of a reduction on the Value Added Tax for accommodation facilities but at the same time expressed its dissatisfaction on the VAT increase on other tourism services.

The Economy Ministry tabled the new tax bill in parliament on 18 November and included a VAT cut from 11 percent to the low rate of 6.5 percent exclusively for accommodation facilities.

And while the Greek hotel sector welcomed the news as the “best heard over the past years,” other tourism sectors were not as enthusiastic.

According to HATTA, the government increased the VAT rate by two units (from the 11 percent rate to 13 percent) for tour buses and coastal shipping services.

On its part, the General Pan-Hellenic Federation of Tourism Enterprises (GEPOET) said the government selectively reduced the VAT rate, thus creating “a two-speed tourism.”

In a letter sent to the relevant ministers and agencies, the federation underlined that the exclusion of travel agencies and tour buses from the VAT reduction would lead enterprises to total devaluation.

“Our enterprises cannot withstand any more discrimination,” GEPOET said.

The Association of Greek Tourism Enterprises (SETE) welcomed the tax cut for accommodation facilities but said the VAT adjustment on a competitive level should be extended generally to all other sectors of the tourism economy, which, along with accommodation, makes up the complete Greek tourist package.