ECONOMY

Just a few food outlets have complied with VAT cut so far

The first few days of reduced value-added tax (VAT) on food services from 23 percent to 13 percent have seen only a marginal drop in retail prices, since the five-month trial period began on August 1.

Despite optimism that the VAT reduction would benefit consumers by leading to lower prices, the first days of the scheme show that there will be a tough battle ahead.

Food outlets that have reduced their prices to reflect the drop in VAT are a distinct minority, with the adjustment ranging between 5 and 8 percent at best. Outlets that have implemented price reductions display a blue sticker signalling their compliance with the measure in Greek and in English.

The government is now waiting to hear reactions from major restaurant and hotel chains, though sector professionals insist that the industry had already absorbed the VAT hikes applied in previous years and may not be able to offer any further discounts now.