A possible increase of the Value Added Tax (VAT) will have “catastrophic consequences” on tourism, representatives of the Greek Tourism Confederation (SETE) said on Tuesday after their meeting with the President of the Hellenic Republic, Prokopis Pavlopoulos.
During the meeting, SETE’s president, Andreas Andreadis, accompanied by the president of the Hellenic Federation of Hoteliers, Yiannis Retsos, and SETE member George Vernicos, assured Mr. Pavlopoulos that the tourism sector will support the government in its efforts to reach an agreement with Greece’s creditors.
“But we also need help from these unreasonable demands of the lenders who are seeking exorbitant increases of the VAT rate that will make us uncompetitive”, he said.
Mr. Andreadis underlined that tripling the VAT rate on tourism was “irrational” and could not be applied.
On his part, Mr. Pavlopoulos wished for this year to be better than 2014 in terms of tourism. “Your success in these hard times is a success for the country, something that the Greek economy needs very much”, he said.
After exiting the Presidential Mansion, SETE’s president said in an announcement that if the VAT rate increases by 120 percent as desired by the country’s lenders, then tourism will be out of competition and will suffer huge, and perhaps irreversible, damage.
According to Mr. Andreadis, the fact that the VAT hike will apply from this autumn “means absolutely nothing” as travel packages are already being booked in advance.
He added that should the measure take effect, the number of job losses next year would amount to 200,000.
“It should be understood that the large hotel chains will not suffer the greatest damage as some believe, but the small and medium size businesses will be crushed”.