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Restaurants Refuse to Pay VAT

For many Greeks eating out or enjoying a coffee in the country’s numerous restaurants and cafes is not simply a pleasant way to pass the time but part and parcel of the Greek way of life. Whilst Londoners may wax lyrical about the local pub and Parisians look fondly upon the neighborhood bistro, for those living in Greece it is the taverna and cafe that form an integral part of their weekly routine, or at least it was until recently.
With the nation about to enter its fourth year of economic slowdown and buying power down nearly a quarter Greeks are struggling to adapt to the realization that for many such habits are now beyond their reach. The imposition of yet another tax hike which raises VAT on food and drink consumed outside to 23% (four times that paid by French consumers) has proven to be the final straw for many struggling to come to terms with the effects of the worst economic crisis in 50 years. With salaries for young Greek now hovering around the 500E a month level the possibility of they’re being able to afford $8.50 iced coffees at Starbucks is fading fast.
Cafe and restaurant owners are now threatening to withhold the tax while most local experts predict that the new measures will prove no more successful in raising revenue than similar moves implemented for petrol (gas) and mobile (cell) phone use. In both cases the increase in tax has lead to a sharp drop in consumption, closure of businesses and ultimately less money in government coffers. .
For many Greeks the decision by deputy prime minister, Evangelios Venizelos to exempt foreign tourists on all inclusive holidays from new tax rise was deeply insulting and despite attempts by the ruling PASOK party to justify the preferential treatment as a way of encouraging the tourist industry failed to convince many.
However, no matter how unpopular the new measures Athens hands are tied, caught between yet another failure to stick to promised economic targets and with the country’s creditors demanding results the complaints of Greek consumers are likely to continue to fall upon deaf ears.

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