Greek Islanders Call for Public Vote on Tourism Tax Hikes

Tourism sector professionals on the Greek islands are calling for a public vote as the talk of a VAT (value-added-tax) hike on tourism picks up pressure and the negotiation process with Greece’s international lenders lingers on.

South Aegean Prefect George Hadjimarkos and Finance Minister Yanis Varoufakis.

South Aegean Prefect George Hadjimarkos said during a press conference on Monday, and following a letter dated June 8 to Finance Minister Yanis Varoufakis, that the islanders have decided “to safeguard the Greek positions in the ongoing negotiations” and to do so “citizens of the Aegean are invited to respond to a referendum”.

The move comes in the midst of a controversial government proposal earlier this year — prompted by its international lenders — to increase VAT on tourism and slash lower rates currently applicable.

The two sides had already met on June 4 to discuss the issue. A finance ministry spokesman told Reuters, however, that he could not confirm the details, nor the legal standing of a potential referendum, which would take approximately two weeks to draw up.

The Greek Tourism Confederation (SETE), representing the majority of tourism enterprises in the country, has repeatedly warned that a tax increase would be detrimental to Greek tourism, which is a main driver of the Greek economy, thus making it uncompetitive, pushing millions of tourists to neighboring cheaper destinations and ultimately taking Greece off the world tourist map.