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Greece cuts VAT on meals to encourage tourism

Greece cuts VAT on meals to encourage tourism
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Greece may be trapped in recession and on a drip feed of international aid, but eating out just got cheaper.

The VAT sales tax on restaurant meals, take-aways and catered food has been cut from 23 percent to 13 percent.

The move by the government was intended to boost tourism, a crucial industry for the economy.

The Finance Ministry expects the move to bring down prices by an average eight percent.

Economist Panagiotis Petrakis told euronews this was a rare opportunity that should not be squandered: “It is crucial to the success of this measure that restaurant owners genuinely reduce their prices, as this is the first time in the last three years that we have a substantial tax reduction in Greece.”

“Reduced VAT” signs in both Greek and in English have popped in many eateries.

But some restaurateurs protested they had already cut as much as they can afford and they doubted the usefulness of this.

Athens restaurant owner Nikos Koutouzis said: “The real issue is that most Greeks can’t afford to eat out any more. It is not that they’ll pay one or two euros less on their bill because of the lower VAT.

But a diner disagreed saying: “It’s good for us customers, it’s good for tourism. Overall, it is good for the Greek economy.”

Our correspondent in Athens explained VAT will only stay down if customers benefit: “If the prices are not reduced, the government has said it will revise its policy and put VAT back up to 23 percent at the end of this year,” said Stamatis Giannisis.