VAT and Greek economy

[Jimbo]

Kernowfox - I agree with a lot of that. It's up to the Greek people to decide what they will or will not do. It's hard to see it as all the fault of the IMF/ECB/EU, much as I would like to.

There will probably  (I think) be an interim deal in the next few days. Not the total deal.

German bookings appear to be down 10% whereas UK is about 2%.

For tourists, all we can do is eat, drink and make it a great place to go to. Which it is.

[Kernowfox]

You could well be right Jimbo. Interim deals ad infinitum may suit all parties.....

[Jimbo]

It's vital for the tourist industry for the uncertainty to end as soon as possible. The last four months have seen little progress. Tsipras and Varoufakis have openly insulted just about everybody, and Junker has, allegedly, now stopped taking any phone calls from Tsipras. Neither side appears to have made any significant concessions at all. The EU etc haven't faced up to the extreme damage austerity has caused to the Greek economy; the Greek government hasn't taken seriously the need for structural change. What we see is a collection of billy-goats bashing their heads together. But ultimately, unless a deal is reached, it will be the Greek billy-goat that will go on the barbecue.

Those of us (75%) who go regularly to Agios Stefanos will see it in personal terms: the friends we have made in the village, and our desire to see them prosper. We will return. But for those merely thinking of where to book a holiday somewhere, anywhere, it would be entirely sensible, unfortunately, to chose Turkey or Spain. It's very important this year that we vote with our feet and help the local economy.

[Jimbo]

eKathimerini has the VAT rates in the "agreement"

http://www.ekathimerini.com/199529/article/ekathimerini/business/four-tier-vat-status-for-islands

[amanda j]

Thanks for the article Jimbo. Will add some more euros to my budget to account for any possible increases. 

[benson]

Has anyone still in the resort noticed any price rises, I see that some trips have risen in price.

Beer and meals ? 13% to 23% equates to 9% rise, surely it will rise to nearest 50cents - rounded up obviously.

So 9€ set meal becomes €10, and a 3€ Mythos becomes 3.5€ ?

[tenbeech]

 The increased Euro exchange rate will dampen the effect of the increased VAT rate ,   The pain will be noticed if or when the Euro rate returns to previous ( Lower) levels.  I'm sure there is a lot more pain to come ,  borrowing money to pay off debts is never going to work.

[Jimbo]

It's 10%, actually.

Most tavernas will probably swallow the increase.

[benson]

100€ at 13% vat = 113€

100€ at 23% vat = 123€

An effected rise of 8.85%

[Jimbo]

That's the overall price, yes - but the VAT increase is still 10%!

[benson]

You could get a job in the greek finance ministry - maths like yours - that's why they're in this mess Jim   

[Jimbo]

Thanks, Benson! Maybe I should stop running a computer company!

Because VAT is proportional, the effective increase of a rate change from 13% to 23% is same as multiplying the base charge by 23 divide 13. This is an increase, as you rightly said, of 8.84955 % approximately.

[Dupnica]

 I wonder how much of these Vat increases are going to reach the government coffers in a country where tax evasion is rampant. How do they collect taxes from the restaurants and tavernas? How much money is actually declared and how much is not? When we were there in June we were told that restaurants were taxed on how many tables they had but that this did not apply to older establishments.
 The police were going round checking that employees were EU nationals and that they had identity cards and that employers were paying their National insurance.
 If Hotels are going to pay an increase in Vat after October will the holiday companies up their prices for next year even for the people who have already booked . I expect Apartment owners will also have to pay more so all of us who go independently won't escape.

[thejoneses]

Safe to say Mythos will remain unchanged , along with ouzo , metaxa and all cocktails. Alcohol has been  23% VAT since before the "crisis" . Phew !!!!!!

[hilary]

San Stefano Travel as a travel agency will honour the prices for all our accomadation bookings for the duration of  2015. No increases will be implemented. However, there could be slight changes for 2016 but this situation will be reviewed at the end of the season.
As always, the sun continues to shine here. Our advise to  friends and customers is to just carry on enjoying your holidays and leave these small worries to us the locals