After agreeing to yield measures worth 8 bln euros, the government has set up a minefield of VAT increases. VAT increases to food items are particularly tricky with hidden details aimed at yielding 2 bln euros in 15 months!
Here are the government’s hidden tax shocks:
– 45% hike to VAT at Aegean islands
100 mln euros more for this year and another 300 mln euros for next year can be found by increasing VAT from 16.5% to 23% in the Aegean. The measure will be applied to upmarket Mykonos and Santorini with VAT staying the same at isolated islands. The right-wing, anti-austerity ANEL party refuses to sign this measure, however members of the Radical Left Coalition (SYRIZA) government are also reluctant to differentiate cosmopolitan from other islands.
– Doubling of VAT at hotels from 6.5% to 13%
A vacation package worth 500 euros will now cost an additional 30 euros.
– 23% VAT to food: Increases to thousands of products and services
Non-basic food items will be affected by this measure. An increase to the prices of processed food such as spaghetti, rice and packaged items will cause grocery bills to escalate. Biscuit, chocolates, chips, soft drinks will definitely be among the food items to note price hikes.
– VAT increases will also affect the prices at restaurants, public transport, taxis and air fairs, maintenance services and entertainment