Value added tax in the Greek food service sector will be reduced from 23 percent to 13 percent starting on August 1, Prime Minister Antonis Samaras said in a televised statement on Wednesday.
In his address the Prime Minister noted that the move marked the first time the troika, as the country’s partners and creditors are collectively known, had agreed to a tax reduction.
“We told the troika that if we go from 23 percent to 13 percent, state revenues will rise and tax evasion will be curbed,” said Samaras. “They still don’t believe this, but they agreed to the implementation of the reduction.”
Samaras noted that he reached the decision regarding VAT at cafes, bars and restaurants, following discussions with business groups, chambers of commerce and store owners. He did warn, however, that store owners must issue receipts because if tax evasion persisted the tax would be increased again. If the measure proved a success, however, more tax reductions could follow.
Furthermore the government, Samaras said, would not be imposing certain measures, such as pension cuts for the military and extra tax for company revenues, that had been agreed with the troika for 2014.
“Contrary to what certain people claim we have made real progress,” he said.