Crooks spot opportunity in coffee tax

The introduction of a special consumption tax on coffee in Greece in 2017 has led to the emergence of smuggling rackets that sneak the commodity over the northern border from neighboring countries such as Bulgaria, Albania and North Macedonia.

Greek Coffee Association officials said at a press conference on Tuesday that people fill up their cars with packages of coffee purchased mainly in Bulgaria before driving to Thessaloniki and other Greek cities to sell it without paying any Greek taxes. This activity is estimated to deprive the state coffers of at least 12 million euros per annum.

The tax raised revenues of 90.7 million euros in 2017 and 122.7 million in 2018, while retail prices have increased by 10-30 percent – depending on the type of coffee. There was also a 1.9 percent drop in consumption in 2018 from 2017. A further decline is projected for this year.

Association officials asked for the tax to be abolished and said that coffee shops, which are typically very small enterprises, have seen their turnover fall 10-15 percent, which has forced some to shut down. They also argued that the institutional framework within which the tax was imposed generates problems for exports too.