ATHENS – Greece’s economy is expected to grow at least 5 percent in 2022 during the waning COVID-19 pandemic and the major rival SYRIZA that’s enough, despite an energy crisis, to cut the 24 percent Value Added Tax (VAT) on food.
“It is necessary that the VAT on basic food items is immediately reduced as well as the special consumption tax on fuel and natural gas,” SYRIZA-Progressive Alliance spokesperson Nasos Iliopoulos told Real FM radio.
The New Democracy government of Prime Minister Kyriakos Mitsotakis has pulled back from a pledge to reduce the VAT on food despite soaring inflation that has cut deep into households ability to deal with the costs.
The government has pumped 9 billion euros ($8.79 billion) into providing subsidies for electric bills that doubled and said state aid would continue into the winter, including for natural gas users and fuel oil.
Iliopoulos said it would cost 1 billion euros ($980 million) to reduce the food VAT for a year and 1.5 billion euros ($1.46 billion) for a special consumption tax, arguing that, “They are fiscally feasible measures and emergency measures that we have to take as long as the price spike lasts.”
He said SYRIZA has proposed proposed permanent interventions, referring to the “up to 10,000 euro ($9,763) tax-free policy for freelancers and self-employed,” without explaining how that would be funded with tax cuts reducing revenues.
“Based on Eurostat data, Greece currently has the highest monthly inflation increase in the Eurozone, while it is one of only four EU countries where the poverty rate increased between 2019 and 2021 … according to ELSTAT, 80 percent of the income of the weakest is spent on rent and food,” citing statistics from the EU and Greece’s agency responsible for data.