The extreme northeast Aegean island of Samothrace was the “cherry on the cake” of the leftist Greek government’s decision — mostly supported by the opposition in Parliament — to suspend the harmonization of VAT rates for several islands plagued by the refugee/migrant crisis over the past two years.
Voting for the measure was scheduled for late on Monday evening but postponed for Wednesday following a request for a roll call vote by the socialist PASOK party in Parliament.
The measure was included in a draft omnibus bill aimed to boost electronic transactions in the country, part of standing efforts to curb tax evasion, along with reforms to Greece’s antiquated bankruptcy code and a new framework for disclosing income, among others. The suspension of the VAT hikes for the islands will last for one year, and not indefinitely.
The decision would suspend the measure to abolish a 30-percent VAT discount on various islands, such as Lesvos, Hios, Samos and the islands of the Dodecanese chain, primarily the pre-eminent holiday destination of Rhodes and far-off Karpathos.
Namely, the measure, which will maintain a 30 percent discount on VAT rates, will apply to the islands of Lesvos, Lemnos, Agios Efstratios, Chios, Psara, Oinousses, Samos, Ikaria, Kos, Kalymnos, Nisyros, Patmos, Leros, Symi, Astypalea, Chalki, Kastellorizo and Samothrace, many of which have been affected by the refugee flows.
At the same time, 15 islands in the Cyclades and Sporades — Skopelos, Amorgos, Ios, Kythnos, Serifos, Sikinos, Anafi, Kimolos, Folegandros, Iraklia, Donousa, Shoinousa, Koufonisia and Delos –will in fact lose the special VAT status as of January 1, 2017, and see increase applying to medications, hotels, books and magazines, basic food items, fuel as well as coffee.
Santorini, Mykonos, Naxos, Paros, Rhodes and Skiathos were the first islands to lose the special tax status in October 2015 and were followed by the islands of Syros, Thassos, Andros, Tinos, Karpathos, Milos, Skyros, Alonissos, Kea, Antiparos and Sifnos in June 2016.
The measure, however, leaves a 50-million-euro gap in the 2017 budget.
All of the other islands in the Aegean will see VAT rates reach the same level as the rest of Greece — i.e. going from the lowest rate of 5 percent (for very few items, like books) to 6 percent; the medium rate of 9 percent will reach 13 and the highest previous rate of 17 percent will reach the “Scandinavian-like” 24 percent.
The latter and highest rate affects most goods and services sold in Greece.
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