ATHENS – Prime Minister and Radical Left SYRIZA leader Alexis Tsipras’ cut of the Value Added Tax (VAT) from 24 to 13 percent in a bid to regain favor with voters with elections coming won’t apply to what many Greeks love most: food and beverages, including coffee.
He imposed an avalanche of tax hikes and new tariffs he swore he wouldn’t, but did to meet the demands of the country’s European Union creditors who in the summer of 2015 put up a third bailout, for 86 billion euros ($96.63 billion.)
That saw him plummet in surveys with May 26 elections for Greek municipalities and the European Parliament coming and with general elections later this year with the party he unseated, the major opposition New Democracy, leading big.
Tsipras announced handouts that would return to many Greeks a tiny portion of what was taken from them in austerity measures and the tax cuts but the business newspaper Naftemporiki said the VAT cut won’t be given to 40,000 businesses in food and beverage.
That includes the favorite hangouts of many Greeks: cafes, grills, fast food outlets and bars, where the higher VAT rate will still be in effect, the paper said.
“The measure (VAT reduction) is positive, but half-hearted,” the President of the Hellenic Confederation of Professionals, Craftsmen & Merchants (GSEVEE), Giorgos Kavvathas told the paper. He also represents the federation for restaurateurs and related businesses.
Kavvathas said half of the relevant businesses in the country will not benefit from the VAT reduction and said the sector has lost 30 percent of its turnover since 2010, when crisis began and the then-ruling PASOK Socialists under Prime Minister George Papandreou sought the first bailout for the country, some 110 billion euros ($123.59 billion) that turned into three for 326 billion euros ($366.28 billion) that won’t be repaid until 2060 at least.