ATHENS: Greece intends to implement in September two unique types of value added tax (VAT) rates at 18 percent and 9.5 percent, reduced to 15 percent and 6.5 percent if payments are made by credit card or debit card, Finance Minister Yanis Varufakis told private Star television channel.
With this new tax scheme, replacing the current 23 percent, 13 percent and 6.5 percent rates, the government will increase revenues by at least 200 million euros ($223.6 million) per year, the minister said. By encouraging card payments, the government also expects to reduce fraud in the collection of VAT, a significant headache for the government. Varufakis added that the reduced VAT would be applied to food, medicine and newspapers, while the rest would be subject to the standard rate.
Thus, food will retain its current tax of 6.5 percent if the customer chooses to pay by credit card; if not, the consumer pays an increased three percent points. The change of the VAT system is part of the reforms Greece is negotiating with creditors to obtain the bailout package worth 7.2 billion euros.
