Varoufakis gam(bl)ing with VAT changes

3% VAT reductions for cash card purchases

Finance Minister Yanis Varoufakis confirmed a report by Proto Thema on April 20 stating that people will be offered incentives for cash card purchases.

VAT contributions worth 6.5%, 9.5%, 15% and 18% with the average tax rate beneath 15% even if there is a change to the 30% discount on islands with the possibility of VAT on food item charges changing from 13% to 6.5% and 9.5%.

Should international creditors from the European Commission, European Central Bank and International Monetary Fund agree to these VAT changes there will be a 1-1.5-bln-euro gap to the state budget that the government hopes to cover through the use of credit cards instead of cash purchases. 

23% VAT will be reduced to 18% for cash transactions, whereas VAT is chartered at 13% and 6.5%. This means that 23% contributions for real estate, cars, telephone bills etc will be privy to reductions, though there will be hikes to water and power (from 13% to 18%) and hotel prices from 6.5%VAT to 15%.

 

A single 15% contribution will be imposed on purchases using plastic money for everything (instead of 6.5%, 13% and 23%) with a reduced 6.5% contribution for food, medicine, books and newspapers. These rates will be for those who use credit cards regardless of the cost of the transaction. Furthermore, the use of taxation on credit cards is being considered so as to encourage consumers to use debit cards.