Living with Greece’s new tax increase

How are Greeks dealing with the country’s new value-added tax? Where are they cutting corners? As Marinathi Milona reports from Thessaloniki, many Greeks feel the increase is the right plan at the wrong time.

Two weeks ago, the Greek government began implementing one of the new reform measures negotiated in Brussels: a VAT increase. And the Greek tourism industry has been affected more than any other.

In the middle of the summer tourist season, restaurant and hotel owners are struggling to find a way to apply the new tax. Pricing and deals with tour operators and airlines were negotiated months in advance, and travelers who have already paid for their vacation will be reluctant to pay additional fees.

“This is very bad for the tourism industry, but also for the whole country in general,” said Giorgos Livanis, a restaurant owner on the Olympian Riviera, near Thessaloniki in northern Greece. “In the long run, we won’t be able to compete with other Mediterranean countries like Turkey, Italy and Spain.”

Livanis points out that the VAT everywhere else is much lower than in Greece. “The others will be pleased when everything becomes more expensive here,” he told DW.

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(Photo of Thessaloniki, Greece: (c) Clive Leviev-Sawyer)