Hiking coffee taxes as part of an avalanche of new and higher rates isn’t working out so well for the ruling Radical Left SYRIZA as it’s led to coffee smuggling rings bringing in the commodity Greeks love from other countries, especially Bulgaria.
The coffee tax was raised in 2017 and has seen business drop at some coffee shops 10-15 percent and a number of them even closing, said Kathimerini, although they had until then survived the country’s economic and austerity crisis, Greeks reluctant to give up their favorite drink and pastime.
Smuggling is also coming from Albania and North Macedonia but most of it from Bulgaria, with Greek Coffee Association officials telling reporters people are filling their cars in the neighboring country before driving to Thessaloniki and other Greek cities to sell it without paying Greek taxes, costing a tax loss of some 12 million euros ($13.62 million) annually.
The tax raised revenues of 90.7 million euros ($102.94 million) in 2017 and 122.7 million ($139.26 million) in 2018, while retail prices have increased by 10-30 percent – depending
depending on the type of coffee. There was also a 1.9 percent drop in consumption in 2018 from 2017. A further decline is projected for this year.
In June, 2018, the Chinese news agency Xinhua reported Greece’s coffee industry was rapidly growing, with the coffee lovers widening, according to latest figures from the International Coffee Organization (ICO), data showing Greeks ranked 17th in the world for consumption per capita.
