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Varoufakis saw his Dream V.A.T. rates collapsing in thousand pieces & percentages

Greece got really and deeply lost in Value Added Tax rates. Monday night Finance Minister Yanis Varoufakis announced his V.A.T. overhaul plan with two rates of 9.5% and 18% for cash payments and 3% “discount on V.A.T.” for non-cash payments. Once Tuesday broke in, the Greek Finance Minister saw his dream proposal collapsing into thousand pieces and percentages.

While the Greek media has started to calculate the prices increases and decreases with the new V.A.T. scheme and some like KTG were pointed out to practical difficulties in the materialization of this rather complicated system, in what it seems zero time the lenders had allegedly rejected Varoufakis’ plan. As if they were making their own calculation in the early morning hours of Tuesday, when Varoufakis revealed the plan on a political magazine of private STAR TV.

“The country’s lenders did not like the idea of the 3% discount on V.A.T,” Greek media reported and …KABOOM! In zero time too, the Greek government drew another paper from the V.A.T. wonder bag, a fresh proposal on Value Added Tax rates and submitted it to the creditors.

7% V.A.T. for food, medicine and other basic goods (?)

14% V.A.T. for hotels, restaurants and electricity bills

23%V.A.T for the rest of goods and services ( and others)

However SYRIZA-affiliated Avgi newspaper posted the fresh Government proposal on V.A.T. as follows:

6.5% V.A.T. for some basic food items, medicine, books and newspaper

15% V.A.T. for hotels, restaurants and electricity bills

21-22%V.A.T for the rest of goods and services

An obviously frustrated Varoufakis twitted Tuesday night:

“The internal Troika rejected our V.A.T. proposals. However the Brussels Group will discuss them tomorrow and Thursday in Brussels.”

Wednesday morning everybody was trying to decode Varoufakis’ “internal Troika“. Whom did he mean with his mysterious oracle?

Is there a rift between Varoufakis and some members of the Greek coalition government? Are there efforts to undermine the popular Greek FinMin?

Do we have a Troika – i.e. representatives of the 3 creditors’ institutions – in our left/wing-nationalists’ coalition government?

The questions remain unanswered so far.

PS and if we are still alive on June 5th, we will still keep seeking answers and V.A.T. rates…

More V.A.T. scenarios you can read here.

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  1. Giaourti Giaourtaki

    So in other words: Buy as many Greek Vinyl records one can get and then start destroying the money system in general after reorganizing the agriculture sector.

  2. Once a tax is placed on goods, the public adjust to paying the extra cost especially if it is essential to them. Commerce sells at a price that they can make a good profit. If the tax is reduced then it is not always true the price will go down unless a competitor sees an advantage in dropping the price.
    Obama found that reducing tax on petrol didn’t bring the cost to the consumer down overall.