SYRIZA PS, with its announcement, fully supports the letter of the Cyclades Chamber to the Prime Minister regarding the review of the application of reduced VAT rates on all the islands of the Cyclades. As emphasized in the announcement, “our position remains firm: the universal application of the measure is not a privilege, but a necessary tool for compensating for the increased cost of living and operation in island societies”.
The letter of the Cyclades Chamber conveys the strong concern and protest of businesses and residents of the Cyclades, for the universal exemption of the Cyclades from the reinstatement of reduced VAT rates on the border islands. According to the Chamber, the abolition of the regime in 2015 proved to be fiscally ineffective. According to data from the Public Administration and Revenue Service, the expected revenues of €347 million per year were not verified – the actual yield did not exceed €100 million, while at the same time there was a contraction in consumption, a decrease in collectability and a strong seasonality in revenues.
In its announcement, SYRIZA PS points out that, “as highlighted in the recent press release of the Cyclades Prefectural Committee SYRIZA PS after the Prime Minister’s announcements at the TIF, the implementation of reduced VAT on the islands is a matter of equality, support for entrepreneurship and social cohesion”.
The announcement of the Cyclades SYRIZA PS Prefectural Committee states: “The abolition of reduced VAT rates was agreed in 2014 by the then Samaras government within the framework of budgetary commitments. When the SYRIZA-ANEL government took office in 2015, it ensured the exemption of five islands and introduced the Transport Equivalent, in order to limit the additional transport and operating costs, protecting local economies.
The universal application of reduced VAT on the Cyclades islands:
● Strengthens the competitiveness and sustainability of businesses.
● Restores the purchasing power of households.
● Ensures social and regional cohesion.
SYRIZA remains firmly on the side of the islanders and local businesses, demanding fair policies that recognize the permanent insularity and enhance development in the Cyclades.”
In addition, the Chamber emphasizes in its letter to the Prime Minister that the adoption of the measure will constitute a substantial development intervention, support for entrepreneurship and a guarantee of social justice. Above all, it will demonstrate in practice that the State recognizes insularity as a permanent and non-negotiable condition and not as a temporary issue that can be addressed with piecemeal measures.
It also speaks of “the false impression that exists that all businesses in our Prefecture are prosperous”, since in reality they face serious economic and social impacts, such as…
Small island retail businesses are being suffocated by the excessive reduction in consumption, competition from department stores and e-commerce and high operating costs.
Catering and tourism businesses are recording losses that in many cases reach 30% of their turnover, while the lack of staff and additional burdens (energy, raw materials, payroll, digital platforms / obligations) further burden their viability.
The Transport Equivalent, which theoretically compensates for the additional transport costs, presents systematic delays, making it practically ineffective.
Winter isolation is exacerbated by poor connections, with the result that entire islands are served by a single ship for over a year.
The cost of living for households remains significantly higher than the national average, with the prices of basic goods and fuel making everyday life unbearable.
