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Economy

Greece Will Use Oil Refineries Profit Tax to Fund Food Subsidies

December 20, 2022

ATHENS – A 650-million euro ($690.74 million) plan to provide 10 percent subsidies on food bills for Greece’s low-income will be paid by receipts from a windfall profit tax on the country’s two oil refineries, the Finance Ministry said.

Facing a re-election fight in 2023 – after already putting up 9 billion euros ($9.56 billion) in state aid to cover 90 percent of soaring electricity bills on households, the New Democracy government has been trying to help deal with rising food prices.

But Prime Minister Kyriakos Mitsotakis earlier backed away from a pledge to consider lowering a 24 percent Value Added Tax (VAT) on food, his government instead pushing supermarkets to hold down prices on 51 essential items for a so-called Household Basket scheme.

The supermarket and groceries subsidies that will extend to food places such as bakeries will go to about 85 percent of households in the country under a staggered scale that sets conditions for eligibility.

Countries around the European Union have been announcing windfall taxes on oil and gas firms as part of emergency measures to help consumers deal with a twin inflation and energy crisis, Reuters noted in its report.

“Without any fiscal cost, we will tax the refineries for 2022 … to collect, we estimate, 650 million euros,” Finance Minister Christos Staikouras told state television ERT although rival political parties mocked it as insufficient.

The amount will be finalized once Greece’s two oil refineries, Helleniq Energy and Motor Oil, publish financial results for the fourth quarter, Staikouras said, the companies benefitting from earlier big increases in gasoline prices.

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