VAT earnings soar on holiday islands


TAGS: Taxation, Finance

Value-added tax takings from the Greek islands posted a significant rise in August, offering state revenues a big peak season boost, according to figures released by the General Secretariat for Public Revenue.

The growth in revenues from resort islands reached up to around 170 percent above the target in some cases, with the biggest increases recorded at popular holiday destinations such as Myconos, Rhodes and Santorini. This means that it was not just tourism entrepreneurs that benefited this August, but the state too.

The data showed that VAT revenues on Myconos beat the target by 170.1 percent, coming to 3.5 million euros against a projected 1.3 million. On Rhodes the main indirect tax fetched 14.9 million euros last month, against a target for 5.6 million, or 165.6 percent over expectations. VAT revenues on Santorini beat the target by 114.4 percent, reaching 3.9 million, having been anticipated at 1.8 million euros. On Zakynthos the figure amounted to just under 2.4 million euros, 91.2 percent above the 1.2-million-euro target. On Corfu the VAT collected was 78.6 percent more than the target, as takings came to 6.4 million, compared to an expected 3.6 million euros.

The sum of 17.6 million euros more than expected in the above five cases, mirrored on many other popular holiday islands too, is attributed to three main factors. The first concerns the increase in the main VAT rate from 23 to 24 percent from June, as agreed in the latest negotiation with the country’s creditors and applied with immediate effect.

The second factor is the now extensive use of plastic money: Month after month Greeks have been upping the frequency of their card use, while the capital controls have forced a huge portion of enterprises to install card terminals, thereby reducing tax evasion.

The third reason for the soaring VAT takings was the intensified inspections by the General Secretariat for Public Revenue this summer. Almost every day in July and August its employees made monitoring raids at popular tourism areas, while its message regarding strict inspections was also put across through the media.