Greece Introduces Value Added Tax
Greece introduced a value added tax Thursday on goods and services.
Finance Ministry figures show that the tax will range from 6% on widely consumed goods such as dairy products and wine, to 18% on items like soap and textiles and 36% on luxuries such as cigarettes, cosmetics and coffee.
Ministry officials said that although the tax was formally introduced Thursday, it will not become effective until February, when a three-month price freeze imposed by the Socialist government comes to an end.
The government, which is half-way through a tough economic austerity program designed to cut Greece’s record current account deficit and huge foreign debts, froze the prices of all home-produced and imported goods last November until Jan. 31.
The Socialists said one reason for the freeze was that prices had begun to rise in anticipation of the tax.
Economy Minister Kostas Simitis has said the tax would not lead to increases in the prices of the majority of goods and services and in many cases prices would fall.
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