The Greek Tourism Confederation (SETE) is urging Finance Minister Yanis Varoufakis to keep VAT for hotels at current levels in a letter released by the group on Thursday. The previous conservative New Democracy and socialist PASOK coalition had already planned to raise the 6.5% VAT for hotels to 13% according to demands by Greece’s international creditors. SETE said that the fact that businesses on islands pay as much as 30% less tax than on the mainland should not be confused with the VAT for products.

SETE cited an Ernst & Young report showing that VAT hikes would harm tourism causing lower bookings and lost jobs. Though the state stood to gain 200 mln euros in the short term, from 2015-2020 the revenues would not exceed 70 mln euros per year. The cost for the tourism sector, if such a measure were to be enforced, are estimated to range from 415 million to 680 million euros in 2015. Long-term, the sector would lose 1 to 1.7 billion euros, resulting in a drop to GDP up to 1.4 percent, or 3 billion euros.

The downward spiral would also affect job positions with a VAT increase resulting in the loss of between 18,500 to 30,000 positions for the first year, while over five years job loss would involve 44,000-73,000 positions.

As an alternative, SETE urged the government to implement state controls and introduce a series of new measures to end tax evasion such as the electronic issuing of receipts or linking cash registers to the tax service forbidding cash payments beyond a certain level.

A copy of the letter was also sent to Economy, Infrastructure, Shipping and Tourism Minister George Stathakis and Alternate Ministry Tourism Elena Kountoura.