Taxation on coffee boosts smuggling

“Such high taxation strengthens coffee smuggling and reduces the chances for investments,” commented Mario Cerutti, president of the European Coffee Federation (ECF), as he described the consequences of coffee taxation in Greece.

Coffee in this country is not only burdened with value-added tax but has also been saddled with a special consumption tax since January 2017. Speaking to reporters in the context of the ECF’s annual general meeting that took place in Athens, Cerutti noted that when a special consumption tax was imposed on coffee in Italy, the VAT was scrapped. He went on to argue that a fluctuating tax, based on the market rate of coffee, would be fairer.

Only four other European Union countries have a special consumption tax on coffee, namely Belgium, Croatia, Denmark and Germany. However, in Belgium the consumption tax is particularly low and VAT is 6 percent, while in Germany VAT stands at 7 percent, against 24 percent until recently in Greece, where it has now fallen to 13 percent.

The ECF head also mentioned delays in special consumption tax rebates in cases where coffee has been re-exported from Greece to other countries.