5 May 2015

There is a rumour in Brussels that Greece is considering a flat rate of 18% later this year. This would reduce the current standard rate of 23% by a significant margin, but would increase the cost of basic foods etc. from the current rate of 13%. If the flat rate extended to those supplies enjoying the lower rate of 6.5% such as books and newspapers the increase would be huge, and the suggestion is that even some exemptions will be abolished.
 
The reduced rates enjoyed in the Aegean islands would also be likely to go.
 
The idea of a flat rate is one which is promoted by the IMF and now, it appears, the European Commission too. However other countries in the EU have considered it and rejected the idea as it imposes too high a tax burden on basic necessities.
 
The Greek Government has simply stated that negotiations with its creditors are ongoing with its bailout partners.