Athens Macedonian News Agency: News in English, 13-07-26

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Special signs for restaurants that lower prices after VAT cut

[01] Special signs for restaurants that lower prices after VAT cut

Under the deal, businesses that reduce their prices by at least 5 pct on three quarters of the items on their menu will be allowed to display a special 'compliance sign' that tells consumers that the lower VAT has been factored into their prices.

The sign, in both Greek and English, will inform customers that prices were lowered after the VAT cut.

The agreement also provides for a series of incentives and disincentives to ensure that businesses comply, lower their prices and do not evade taxes.

Finance Minister Yannis Stournaras confirmed plans to introduce stiffer penalties for businesses that fail to issue receipts, perhaps even by shutting down offending venues, to be announced before August 1. Incentives will include additional points for participation in National Strategic Reference Framework (NSRF) programmes and other actions to support small and middle-sized enterprises for the businesses that contribute to the effort to pass on the price cut on to consumers.

The special sign will be given by local catering sector unions once the businesses applying present price lists and menus with the old and new prices, in addition to a copy of their cash register tapes so their prices can be verified.

An initial idea for giving a different colour sign to businesses that only partially pass on the VAT savings to consumers was abandoned in favour of demanding that all participants reduce prices by at least 5 pct for 75 pct of all menu items, since it was judged that many businesses had already absorbed the VAT cut or had cut prices around this time.

The reduction of VAT from 23 pct to 13 pct means represents a reduction in the final retail price of 8.1 pct.

In statements after the signature of the agreement, Stournaras stressed that the government will not risk any loss in revenues as a result of the tax cut.

"We will take all measures to ensure receipts are issued," he underlined and warned that the temporary VAT cut will be revoked if restaurants evade taxes and revenues fall. The minister appeared confident that this would not happen, however, and said the time had come to prove that lowering taxes will also reduce tax evasion, which had risen dramatically after the sector's VAT was hiked up to 23 pct from 11 pct.

Development and Competitiveness Minister Costis Hatzidakis stressed that restaurant owners must show a heightened sense of national and social responsibility by lowering prices, while consumers must demand receipts, so that the reduced VAT rate might be made permanent.

"The opportunity must not be lost, the permanence of the measure can lead to improved competitiveness of the Greek tourist product," said Tourism Minister Olga Kefalogianni. She stressed that 2013 had seen a sharp rise in the numbers of visitors to Greece and a great increase in revenues, meaning that more competitive prices can boost the country's position on the world tourism rankings.

Similarly, representatives of the trade groups that co-signed the agreement appeared confident that their members would rise to the challenge and lower their prices in order to get the special signs.

The head of the Hellenic Confederation of Professionals, Merchants and Craftsmen (GSEVEE) Giorgos Kavvathas said that more than 50 pct of restaurants had already inquired about the new sign and the percentage will rise further once the signs start to go up. He said the success of the measure could be a test for similar VAT reductions in other sectors, while other groups also emphasised the need to issue receipts.

(Photo: The new sign to designate businesses lowering the VAT. The sign will say in both Greek and English, "Lower VAT, lower prices")

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