At a press conference regarding the possible VAT hike, SETE head Andreas Andreadis on Monday described such a move as fiscal suicide. Citing the analysis of economic scenarios for 2015 by SETE Intelligence, he stressed that the implementation of the measure would generate a negative domino effect in the economy, reducing GDP by over 2 percentage points, and that it would also have a dramatic impact on the labor market, as for every million tourists missed out on, some 30,000 jobs would be lost. Andreadis added that the impact on the flow of tourists would amount to 2.5 million fewer next year and even greater losses in 2016.
Andreadis warned that if the VAT rate on accommodation doubles, hotel enterprises will be forced to renegotiate with tour operators, rendering Greek tourism less competitive and pushing millions of tourists toward the country’s competitors. He reminded reporters that Turkey has an 8 percent VAT rate for tourism accommodation and catering, while Portugal’s amounts to 7 percent, and Italy’s and France’s stand at 10 percent.
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