Greek Finance Minister Rules Out VAT Increase

by Ulrika Lomas, Tax-News.com, Brussels

03 September 2002

In an interview on Saturday, Greek Finance Minister, Nikos Christodoulakis ended speculation over the possibility of an increase in VAT rates next year in order to support budget revenues.

Speaking to the Ta Nea daily newspaper, the Finance Minister announced: 'I declare that an increase in VAT will not occur in 2003,' and explained that this was because increasing the rate at which the sales tax is levied would boost inflationary pressure at a time when Greece's consumer price increases are among the highest in the eurozone.

Although the country's EU-harmonised inflation rate remained unchanged at 3.6% in July, the Greek government is still concerned that this is unacceptably high, and indeed within the eurozone Greece is surpassed only by Ireland and the Netherlands in terms of inflation.

According to reports, in a bid to rein in inflation rates, Mr Christodoulakis recently urged Greek consumers to boycott businesses which used the introduction of the euro earlier this year as a cover for unjustified price hikes.

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