Hoteliers Criticize Restaurant VAT Hike

The increase of the VAT for restaurant services in Greek hotels from 13 to 23 percent (a 77 percent hike) would reduce the competitiveness of the country’s tourism product, the Hellenic Chamber of Hotels said recently in an announcement.

The VAT hike on food catering services is expected to come into effect as of this month and is one of the terms of the medium-term fiscal plan passed in July by Greek Parliament after an agreement with the European Commission, the European Central Bank and the International Monetary Fund.

The hike will apply to restaurants, cafeterias, canteens and hotel restaurants.

According to the hotel chamber, the VAT hike would lead to a significant increase in the price of the tourism package and once again degrade Greece’s tourism potential in view of signing contracts with tour operators for 2012.

The chamber said the VAT increase would raise the price of an all inclusive hotel stay from 9.3 percent to 11.8 percent, of hotels with half board from 7.8 percent to 9.8 percent and of hotels with breakfast from 7.8 percent to 9.1 percent.

Following the strong reaction from restaurant owners and tourism professionals, Finance Minister Evangelos Venizelos admitted to the press that the VAT increase on food catering services was in fact very high but added “this may change in the near future, in the context of the new tax system.”