Greek consumers woke up to new prices on Monday after an increase in value added tax on restaurant food and public transport. These hikes, voted through after fast-track procedures, are aimed at restoring trust with Greece’s creditors after an aid-for-reforms deal was struck between Greece and its EU partners to avert the country’s bankruptcy.
It is estimated that the new hikes will cost Greek salary-earners 1,500 euros per year on average in an effort ot yield 5 billion euros to line state coffers.
VAT on hundreds of products will suddenly jump up from 13% to 23% on Monday meaning that prices will automatically cost 9% more in an effort to yield 2 billion euros. The lowest VAT will drop from 6.5% to 6% for medicine, theater tickets and books meaning that while Greeks will have to foot greater payments for groceries they will still have a very small reduction to their theater tickets!
Beef, sugar, vinegar, salt, oregano, coffee, cocoa, processed meat, sugarysweets, crisps, pop corn, gum, cracker, spices, pre-made bread, processed food, sliced bread, corn oil, sunflower oil, etc, fatty products (e.g. margarine), canned food, tomato paste, soda drinks and beverages, food at restaurants, taverns, cake shops, cafeterias, snack bars, canteens, fast food joints etc.
Thousands of services will increase with the self-employed suddenly seeing their earnings taxed from 13% to 23%. Transport services e.g. taxis, coaches, trucks, etc, florists, treatment at private clinics, cinemas, concerts etc. (but not the theater), writers, composers, artists, maintenance repairmen (plumbers, electricians, painters etc.) bike repairers, leather goods and services will be affected.
Transport tickets will be lifted by 23% and this includes fares for buses, ships and planes.
Private insitutions offering extra coaching, foreign language centers, computer centers will have their fees increase by 23%.
From October 1, 2014, hotel, hostel and camping lodges will have VAT increase to 13% from 6.5%
Agricultural and stock production will note VAT increases by 9% with hikes from 13% to 23% for fertilizer, animal feed, seeds, livestock etc.
From October 1, 2015, VAT contribution will increase to 6%, 13% and 23% from current levels at 5%, 9% and 16% respectively. Hikes will begin at the most touristy islands in the Aegean (Mykonos, Santorini etc.)