ATHENS: Greece has proposed VAT rates of 7, 14 and 22 percent in an effort to redistribute the tax impact and lighten the burden on lower income groups. But lenders want rates of 11 and 23 percent and are pressing for an increase in VAT on energy to 23 percent.
“You know what our problem is with the VAT?” he said. “We’re not able to collect it.” He said if Greece is forced to raise VAT to 23 percent “then there will be less tax revenues.
“It sounds crazy but that’s the way it is: the higher the tax rate, the less (willing) people (are) to pay, they then feel entitled not to pay more.”
