Greek island residents face rising costs
October 02 2015 - 6:45PM
Property
02/10/2015
Photo: AprilLynn77
Residents of six Greek islands are facing rising
living costs, as the government scraps their VAT subsidies.As of
1st October, Mykonos, Naxos, Paros, Santorini, Skiathos and Rhodes
all saw their VAT subsidies ended, which previously allowed them to
reduce prices. Tax rates that were once 5 per cent, 9 per cent and
16 per cent will all be raised marginally to 6 per cent, 13 per
cent and 23 per cent respectively.Previously, those lower tax rates
were applied to commodities such as food and alcoholic
drinks, a measure that was partly to help encourage and support the
tourism industry during a time of tight national finances. Greece’s
tourism industry, though, has proven resilient during the financial
whirlwind of recent years, prompting the country’s latest bail-out
agreement to scrap the subsidy. This is expected to see the cost of
such items to rise, affecting not just visitors enjoying lunch and
dinner our, but the locals drinking in the bars alongside them. The
rest of the islands are set to see their subsidies scrapped too,
although the rollout will be staggered, with some holding on to
them for as long as another two years.For those on the Aegean
island of Naxos, the impact is expected to take its toll by
officials."The VAT increase will definitely have an effect. On the
permanent residents initially, and in particular on the pensioners
and salaried employees whose purchasing power will be reduced,"
Naxos Deputy Mayor Dimitris Lianos tells The Seattle
Times.Christina Kalogera, of the Greek National Tourism
Organisation for UK & Ireland, tells The Telegraph that they do
not expect a huge impact upon tourism."Greece is a very good value
destination, offering the highest quality of tourism services to
its visitors, who have ranked the country as one of the best
destinations worldwide."We anticipate that this will still be the
case after the change in VAT."
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