“The VAT rate on food catering services will not be reduced this year even though it was it was a commitment of the government,” Tourism Minister Olga Kefalogianni said last month. The VAT cut on food catering services was one of the government’s pre-election promises.
In July, the Economy Ministry had mentioned the possibility of reducing the VAT rate on food catering services from 23 percent to either 13 percent or even 6.5 percent. Such a VAT reduction would automatically lead to a drop in prices.
According to reports, consumption on food and beverages has dropped by 40 percent due to the 77 percent VAT hike from 13 to 23 percent last September.
The tourism minister said the country’s economic conditions could not allow a VAT reduction this year but that sincere efforts would be made as of 2013.
The VAT hike on food catering services (hotel restaurants, cafeterias, etc.) was one of the terms of the medium-term fiscal plan passed in July 2011 by Greek Parliament after an agreement with the country’s creditors.