ECONOMY

VAT hike coming for commodities

Dozens of everyday commodities are set for price rises as of the start of next year, as the government will be forced to increase value-added tax on numerous products, including foodstuffs. The Finance Ministry’s plan is to draft a new bill that will boost VAT on all products in the low 11 percent bracket to 13 percent, or even 15 percent, as of January 1. Since the increase in the tax for heating oil to the same level as that charged on diesel is not possible, at least for this year, the government will have to shore up its lagging revenues with new tax hikes. However, it will stop short of taking VAT to 23 percent for those products, as sources had earlier suggested. «Setting the fuel tax on heating oil on a par with that on diesel involves many technical problems, such as determining who will need to receive financial support to cover the additional expenses,» said Deputy Finance Minister Filippos Sachinidis. «Consequently, until we have prepared and formed a mechanism to determine who will be eligible for help, objectively this measure cannot apply,» he stated. A top Finance Ministry official suggested that by this Friday the measures to go into the new tax bill will have been decided on and possibly announced, some of which will apply at once and the rest as of the new year. The bill will implement the prime minister’s announcement in Thessaloniki on Saturday regarding the settling of outstanding tax debts for enterprises and freelancers. This measure, which rewards those who did not pay when they were supposed to and is an offense to those that did, is the easy solution for the government to collect an additional 2 billion euros. It will also include the payment of VAT and other taxes in installments. This is set to allow enterprises and freelancers to pay their dues to the tax office in 12 installments, instead of the lump sum that applies today.