The Greek government – trying to raise more money and close the budget gap – has brought in new sales taxes from September 1.
The new VAT rate of 23 percent applies to non-alcoholic beverages and drinks and food in restaurants. It is part of a range of tax increases.
The rise comes as an independent Greek parliamentary committee of experts said the country’s debt has run out of control and government policies are failing to restore finances.
The committee, set up in 2010 as an independent budget control mechanism, painted a bleak picture of the Greek economy as EU and IMF inspectors conducted a visit ahead of approving the next tranche of an international bailout.
“The steep debt rise, high primary deficit … have exacerbated to the maximum the dynamics of debt, which is out of control,” the committee of experts appointed by the finance ministry said in a monthly economic bulletin.
It urged the redoubling of efforts to fight tax evasion and reduce primary deficits in view of a recession that was worse than expected.
“It is clear that the country’s problem is not just the size of the public debt but the inability to consolidate the current fiscal management. Despite gigantic effort for fiscal adjustment, no primary surplus has been achieved. On the contrary, the primary deficit is widening,” the committee said.