GREECE: 32 Greek Isles Experience Price Hikes

Higher value-added tax (VAT) rates are set to apply as of January 1 on products across 32 Greek islands which were exempt from a measure to revert to nationwide the rates of 6, 13 and 24 percent at the beginning of this year.

More specifically, islands in the Dodecanese and North Aegean Region, including the refugee crisis-hit Lesvos and Kos, which also suffered earthquakes this year, will as of January 1 be obliged to revert to the new rates, a demand by Greece’s international lenders.

The new rates will go from the current 5 percent, 9 percent and 17 percent to 6 percent, 13 percent and 24 percent, respectively. Indicatively, prices for medication, books, magazines and newspapers will increase by 1.5 percent after a 6 percent VAT increase on these islands.

The cost of basic food items including meats, fish, dairy, fruit and vegetables and olive oil as well as utilities will increase by 3.7-4 percent after a 13 percent VAT rate is charged.

Finally, services and products including cars, petrol, cigarettes, alcohol, appliances, clothing, fixed and mobile phone charges will also be more expensive by 6 percent following the application of 24 percent VAT.

The said islands, which include Lesvos, Lemnos, Agios Efstratios, Chios, Psara, Oinousses, Samos, Ikaria, Kos, Kalymnos, Nisyros, Patmos, Leros, Symi, Astypalea, Chalki, Kastellorizo and Samothrace, will maintain a 30 percent discount on VAT rates through to the end of this year.

Meanwhile, Investments in tourism to the tune of 4.1 billion euros and projects budgeted at 3.2 billion euros already moving ahead are expected to cement the sector as one of the Greek economy’s key drivers.

Specifically, 250 project plans budgeted at 900 millon euros have already been submitted to the economy ministry while a series of projects budgeted at 3.2 billion euros are in the pipeline waiting to get the green light to proceed, upgrading in the meantime, the country’s tourist product.

Indicatively, in this year alone, more than 195 investment plans have been submitted to the tourism ministry, 125 of which concern hotels, one tourist resort, five conference centers, two golf courses, 10 ski resorts, three theme parks, 24 hot spring facilities and 25 mountain resorts.

Meanwhile, according to the Greek Tourism Confederation (SETE), travel receipts are expected to reach 14.5 billion euros in 2017, in which case the sector will contribute one unit to the country’s GDP.

SETE’s research unit, InSETE, underlines the need for new investments to the tune of 5-7 billion euros over the next four years for the sector to continue its healthy course of growth.

A sign of Greece’s improving reputation includes the interest of major international players – the likes of TUI Group, Four Seasons, Marriott, and Wyndham, among others – seeking to further enhance their standing or invest anew in Greece.