ECONOMY

Levy on tsipouro and wine to hurt only the legal producers

levy-on-tsipouro-and-wine-to-hurt-only-the-legal-producers

At least 100 million euros per year are lost from state coffers from the illegal trade in bulk tsipouro, a potent, traditional Greek spirit, rising to 200 million when the unpaid value-added tax and income tax are added, according to the Foundation for Economic and Industrial Research (IOBE). Furthermore, almost 60 percent of the wine produced in Greece is sold illegally in bulk, without invoices or receipts.

As the illegal tsipouro and wine markets continue to blossom, the government has chosen to tax legal wine and spirit producers, with dubious benefits for state coffers. The New Wines of Greece association (EDOAO) is examining the option of appealing to the European Union against the imposition of a special consumption tax on wine, set to apply from January 1, 2016.

“Much ado about nothing,” is how well-known wine and spirit producer Constantinos Tsililis responds to the government’s decision to impose a reduced special consumption tax on wine. He explains that for the tax to be imposed and collected, all wine makers must create tax warehouses. “Its is a huge bureaucratic procedure and also requires a letter of guarantee to be submitted to a bank. In practice, only a handful of money will be collected and only law-abiding units will pay the price,” he adds.

Moderate estimates suggest that 24 million liters of tsipouro is sold in bulk every year. In the rare cases that sales are legal and accompanied by an invoice, tsipouro in bulk carries a tax of just 0.59 euros per liter. Bottled tsipouro, which does not exceed 3 million liters per annum, however, carries a special consumption tax of 3.60 euros per 700-ml bottle. Bulk tsipouro can only be produced by vine growers who have a special permit issued by the Agriculture Ministry or the local authorities. The industry, however, has been taken over by a small number of professionals who amass and use the permits to produce huge bulk quantities of tsipouro, unhindered and untaxed. The income they generate is not taxed either, of course.

As for wine, much of it is sold in bulk at tavernas and restaurants, without there being a clear picture of where it come from. Wine makers have repeatedly demanded that the origin, the type of grape and the producer be mentioned on menus, but to no avail.

In France, the law requires that all wine is bottled, even that which will be sold in bulk, for the express purpose of cracking down on tax evasion and ensuring quality.