VAT reduction on islands not ruled out

Prime Minister Kyriakos Mitsotakis hinted on Wednesday at a possible reduction of VAT on the islands in a discussion he had with a local businessman during a visit to Astypalaia.

After the businessman, an owner of a traditional workshop in Hora on the island, outlined the difficulties faced by companies, Mitsotakis noted that there have been reductions in income tax and that “VAT will be the next step, when our public finances are fully balanced.”

Referring to the measures taken by the government to keep the economy afloat during the pandemic, Mistotakis emphasized that the goal was “to keep businesses alive” so they can enter the path of growth once life returns to normal.

Mitsotakis visited Astypalaia to inaugurate a plan by German automaker Volkswagen to turn it into a model island for climate-neutral mobility and green energy. 

In his meeting with the CEO of the Volkswagen Group, Herbert Diess, Mitsotakis described Astypalaia as “a symbol of what we can do to accelerate the green transition” and hailed it as a “window to a cleaner and greener future.”

Astypalaia, he said, is the “test base for the green transition” and energy autonomy, completely fueled by nature.

In the meantime, the government is bracing for a return to political “normalcy” in the coming days with the expected submission to Parliament of the labor bill, and opposition SYRIZA preparing to wage a bitter battle against it.

In response to the bill, public and private labor unions on Wednesday called a 24-hour general strike for June 10 to protest the legislation which, they insist, will jeopardize workers’ rights.

The government has defended its proposals, saying they are designed to modernize labor legislation that has remained largely unchanged for decades. It has also stressed that the proposed legislation will not threaten, as unions claim, the eight-hour workday. Unions also say that the bill will make it more difficult to call a strike.

But next week will only be the beginning of what is scheduled to be a very busy season, as there will be no summer recess for Parliament this year and there is a backlog of legislation to be debated after the delays created by the pandemic.