Greece’s new government is considering bolstering tourism by cutting VAT on hotels and restaurants, having already re-established a tourism ministry.
The government aims to reduce the 23% VAT rate on rooms to 12%-15%, moving in the opposite direction to that under consideration in Spain.
The new tourism ministry is also poised to match UK tour operator funds for marketing, although a budget has yet to be finalised. A spokesman for the Greek National Tourism Organisation said: “The ministry is offering money to work with operators.”
Operators have been arguing for funding for months. The VAT change is subject to agreement with the European Central Bank, European Commission and International Monetary Fund – the ‘troika’ that now oversees the country’s finances.
The coalition government, elected on June 17, moved immediately to establish a new tourism ministry separate from the department of culture and sport of which it was formerly a part.
Christos-Iraklis Skourtis, vice-regional governor of Corfu, said: “The government wants to make tourism cheaper. They are talking about VAT of 12%. It would make prices better. The problem is they have to convince the troika to give us space to breathe.”
Skourtis is confident some funds will be released. He said: “It would be stupid to set up the new ministry if there are no funds. But it is very early. The budget is not set.”
He was in London last week for talks with operators and said: “Things have changed since the election. Everyone understands tourism is our hope.”