VAT hikes to make Greek destination less popular

The country’s tourism package will become much dearer as of October, when tax hikes to related services such as food service, accommodation and transport come, into full application.

As of last Wednesday, Greece has the fourth highest value-added tax rate in the European Union in food service (23 percent), behind only Hungary (27 percent), Denmark (25 percent) and Romania (24 percent). From October it will also have the sixth biggest VAT rate in accommodation (13 percent), trailing only Denmark, Slovakia, Britain, Hungary and the Czech Republic in the EU.

A comparison of Greece with rival destinations shows how damaging the VAT hike will likely be for the country’s tourism: Croatia has a 13 percent rate on both accommodation and food service; Bulgaria charges 9 percent on hotels and 20 percent on catering, Italy and France have 10 percent in both categories and Cyprus has just 9 percent.

The increase in the tax deposit enterprises have to pay, from 55 percent to 75-100 percent, shows the problems tourism firms will soon face.