In response to the latest developments concerning Greece’s negotiations with its creditors, the Greek Tourism Confederation (SETE) released an announcement on Tuesday and said it applauded the government’s stance yesterday and hoped that a deal is reached this week.
The government submitted a reform plan to Brussels on Sunday and, following an emergency summit on Greece’s debt crisis on Monday, Eurozone leaders said they were finally moving towards a deal on Greece.
VAT on accommodation
In its announcement, SETE reminded that — in support of the Greek government and the economy — the entire tourism sector is willing to accept a 6.5 percent to 13 percent value-added-tax (VAT) hike on accommodation, as long as the VAT on food services remains at the 13 percent rate.
However, statements made by the government spokesman, Gabriel Sakellaridis, this morning revealed that Greece’s creditors are still pressuring the government to increase the VAT rate on the tourism package (accommodation and food services) to 23 percent.
“Incomprehensible” persistence for 23% VAT rate
“If this goes ahead, the result will be catastrophic and our tourism product will be completely knocked out of competition, since the average VAT of competing countries is around 8 to 10 percent”, SETE underlined and once again stressed that a holidaymaker’s choice destination depends fully on the issue of cost.
“We still can not comprehend the reasons why the lenders insist on imposing an uncompetitive VAT rate on the Greek tourism product and we ask: Who stands to win from that?”
The association stressed that such a VAT hike would shift the flow of millions of tourists to rival and neighboring countries, depriving Greece of necessary income, several units of the already shrunken GDP and thousands of jobs.