Cred­i­tors op­pose re­duced VAT

Levy on pri­vate ed­u­ca­tion will have to be either 23 per­cent or zero, mis­sion chiefs tell the gov­ern­ment


The gov­ern­ment’s plan to im­pose two re­duced value-added tax rates on pri­vate ed­u­ca­tion ser­vices with im­me­di­ate ef­fect has run into the op­po­si­tion of the coun­try’s cred­i­tors, whose mis­sion chiefs re­jected the idea dur­ing the meet­ings that took place this week in Athens.

Sources say that the cred­i­tors ex­pressed ob­jec­tions to the Ed­u­ca­tion Min­istry’s in­ten­tion to im­pose VAT of 6 per­cent on tutoring schools, known as “fron­ti­s­tiria,” and 13 per­cent on pri­vate schools, given that the Euro­pean Direc­tive on VAT does not pro­vide for re­duced rates on ed­u­ca­tion.

In prac­tice, this means that the direc­tive al­lows Euro­pean Union gov­ern­ments either to im­pose no VAT on pri­vate ed­u­ca­tion or to ap­ply the full VAT rate, which in Greece stands at 23 per­cent, should they choose to in­clude the pri­vate ed­u­ca­tion among VATbur­dened goods and ser­vices.

A top Fi­nance Min­istry of­fi­cial ad­mit­ted yes­ter­day that the is­sue of VAT on ed­u­ca­tion will have to be dis­cussed fur­ther with the cred­i­tors.

This de­vel­op­ment has cre­ated a new stum­bling block for the gov­ern­ment, which will now have to de­cide whether to im­pose a blan- ket 23 per­cent rate on all en­ter­prises that of­fer ed­u­ca­tion ser­vices or go back to the draw­ing board to find off­set­ting mea­sures amount­ing to over 300 mil­lion eu­ros.

Worse, the ex­ten­sion granted to the tem­po­rary non-ap­pli­ca­tion of VAT on pri­vate ed­u­ca­tion ser­vices ex­pired yes­ter­day, with­out any fur­ther in­for­ma­tion from the gov­ern­ment. This will cre­ate ad­di­tional woes for the sec­tor’s com-


1.1084 pa­nies, as they still do not know whether they should is­sue re­ceipts with VAT or not.

The prob­lem is even greater con­sid­er­ing that the gov­ern­ment will have to is­sue its de­fin­i­tive ver­dict next week, as find­ing new mea­sures to off­set the loss from aban­don­ing the 23 per­cent VAT rate on ed­u­ca­tion con­sti­tutes a prior ac­tion re­quired for the dis­burse­ment of the sub­tranche of 2 bil­lion eu­ros.

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