Based on the budget plan of 2018, in addition to the amount of EUR 48 million provided for by the taxation of the short-term tourist leases, the amount to be collected from the new residence tax corresponds to EUR 74 million, according to a study by Insete, of the Association of Greek Tourist Enterprises, the corresponding amount is estimated to be close to 200 million. Hence the proposal of the President of SETE, Mr. Giannis Retsos, is that the EUR 125 million resulting from difference to be used “to keep the reduced VAT rate on the Aegean Islands supporting local societies”.
For their part, tour operators consider that the increase in VAT will bring zero financial benefits, while bringing a key blow for local communities, residents and businesses, basically supporting the islanders who will go on strike for this reason over the following days. On the occasion of these mobilizations, the chairman of the Chios Chamber of Commerce Giorgos Georgoulis said yesterday that “the absurdity of the abolition of the reduced VAT rate was proven by the results from the Institute of Economics and Taxation Studies in the framework of a study undertaken at the initiative of Chios Chambers, Lesvos and Samos. According to these, they had estimated that the islands would have additional revenue EUR 250 million, but tax evasion and extra revenues have increased bringing this extra revenue to just EUR 65 million, while the abolition of the reduced VAT on islands we will not bring more than EUR 20 million”.
In addition, apart from the abolition of the reduced VAT, tour operators believe that the residence tax will most likely hurt the weak businesses -small hotels and those of the lower categories are the overwhelming majority of the Greek market- and will contribute to an increased seasonality. For example, for a 4 star hotel in Kalambaka with an average price around EUR 45, the tax charge accommodation is 6%. “The tax, especially in the form of a fixed amount per night, as of 1 January 2018 regardless of season and destination, will be a disproportionate burden for units with low prices, with an increase in seasonality”, says Insete.
It must be noted here that the residence tax is set between EUR 0,5 & 4 per day and per room in hotels, depending on the category and EUR 0,5 per day in the rooms to let.
