ECONOMY

Food market demands cut in VAT rates

food-market-demands-cut-in-vat-rates

Suppliers and retailers in the organized food market are sending a clear message to the government to reduce value-added tax on food if price hikes are to be contained, as Tuesday’s announcement by the Research Institute of Retail Consumer Goods (IELKA) indicates.

The statement also includes a warning: While Greece has not seen the sharp price increases observed in most other European Union countries, this may change in the near future. July prices in Greece compared to January 2020 – i.e. before the pandemic – were just 1.1% higher, one of the smallest rises in the EU.

However, IELKA noted, “there are signs there may be some stronger pressure for increases in the consumer price index in Greece and in prices in the market, due to the weather conditions as well as the hikes in energy costs.”

“For now increases in raw materials have been largely absorbed by the supply chain, but this should not be taken for granted in the future. A significant obstacle in the management of prices at lower levels is the VAT rates,” the IELKA statement clearly spells out.