Pilot scheme for lower VAT mooted

Min­istry pro­poses six-month test of lower rate for restau­rants in talks with troika

Kathimerini English - - Front Page -

Af­ter re­port­edly re­ceiv­ing a luke­warm re­sponse from troika of­fi­cials to Greece’s re­quest to re­duce value added tax on restau­rants and tav­er­nas, Fi­nance Min­istry of­fi­cials are propos­ing a six-month pilot pro­gram to test the im­pact of such a scheme on rev­enues, sources said yes­ter­day.

Min­istry of­fi­cials broached the is­sue of the VAT – which the govern­ment wants to lower to 13 per­cent from 23 per­cent in a bid to boost small busi­nesses and the tourism sec­tor – dur­ing talks with troika mis­sion chiefs who re­turned to Athens yes­ter­day.

As Greece’s for­eign cred­i­tors are not keen to cut taxes, the pilot scheme would be a way of test­ing whether the pro­posed ini­tia­tive would slash rev­enues. If not, in prin­ci­ple, it could be ex­tended.

Ac­cord­ing to sources, troika of­fi­cials are open to such a scheme be­ing ap­plied to ho­tels, which are brac­ing for what is ex­pected to be a record year for tourism.

Troika and govern­ment of­fi­cials yes­ter­day also dis­cussed the progress of struc­tural re- forms, in­clud­ing planned lay­offs in the civil ser­vice, as well as ways of plug­ging an an­tic­i­pated fund­ing gap for next year of 4.6 bil­lion eu­ros.

Ac­cord­ing to sources, the govern­ment will meet its com­mit­ment to lay off 2,000 civil ser­vants over the sum­mer but of­fi­cials are find­ing it hard to iden­tify the 12,500 em­ploy­ees that must join a so-called mo­bil­ity scheme by the end of the month.

Talks with the troika are ex­pected to re­sume to­mor­row.

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