Taxes and Energy Costs Taking Toll on Greek Tourism and F&B Businesses

Photo source: Stirizo HORECA.

Greek businesses providing hospitality and F&B services reiterated their call on the government to take immediate support actions in view of rising taxes and energy prices.

During a special event at this year’s HORECA which took place in Athens last week, associations representing Greek hospitality and F&B services providers – also members of the “Stirizo HoReCa” (Support HoReCa) Alliance – warned that indirect taxes and soaring energy costs are threating the viability of their enterprises.

Indicatively, according to data released by the Foundation of Economic and Industrial Research (IOBE), Greece has the highest indirect tax rates affecting accommodation and F&B ventures compared to rival countries. VAT, duties on alcoholic beverages and coffee, and a special accommodation tax account for 11 percent of the government’s indirect tax revenues.

Additionally, 112,000 hospitality and F&B enterprises create approximately 552,000 jobs accounting for 11.9 percent of total employment in Greece. The sector is one of the country’s fastest growing contributing more than 5.5 percent to Greek GDP in 2021 and yielding 3.6 billion euros in wages and insurance contributions and 1.181 billion euros in taxes or 2.5 percent of total tax revenue.

Greece is in the ‘lead’ compared to other rival markets with a VAT rate of 13 percent on accommodation, followed by Italy, France and Spain (10 percent) Cyprus (9 percent), Malta (7 percent) and Portugal (6 percent).

Additionally, the associations cited a recent study released by the Hellenic Confederation of Professionals, Craftsmen, and Merchants (GSEVEE) which found that six in 10 restaurant businesses went out of business in 2021 impacted by the pandemic.

In view of these figures, the associations are reiterating their call on the government to take actions that will relieve them of the financial burden and allow these enterprises to grow.

Key demands include reducing VAT in F&B to 6 percent from the current 13 percent and implementing a special energy charge scheme for hospitality and F&B enterprises.

At the same time, hospitality services providers are also calling for a reduction in VAT on hospitality and immediate regulation of the short-term rental market.