Greece Cuts Restaurant Taxes

The Greek government finally decided to cut the restaurant sales tax on food and drink across the country, making it affordable for consumers to go out and grab a meal.

New government tax cut

greece restaurantAfter years of suffering, government cuts and recession, things in Greece would change at least for the restaurant industry. The restaurant sales tax, which was 23%, has been reduced to 13%. The Greek Ministry of Finance says it expects this tax-cutting procedure will reduce customers’ restaurant bills by 8.1%. The temporary cut on tax, which will last until the end of 2013, is a clear means to boost spending and tourism across the country.

Boosts tourism industry and stay competitive

It’s expected that the tax break will cost the government 100 million Euros in lost tax revenue in the short period, but will ultimately benefit the country in the end as it boosts tourism spending and encourages restaurant owners to report more of their revenue to the government.

The process comes as the Mediterranean country struggles through its sixth year of deep recession.

“The VAT tax rate cut is undoubtedly a positive measure,” said Georgios Drakopoulos, director general at the Association of Greek Tourism Enterprises in Athens.

Drakopoulos said he is now urging the government to maintain the tax break at or below 13% into 2014, explaining that it helps the country’s tourism industry stay competitive.