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 (news247.gr 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:
H τρόικα εσωτερικού απέρριψε τις προτάσεις μας για τον ΦΠΑ. Το Brussels Group όμως θα τις συζητήσει αύριο και την Πέμπτη στις Βρυξέλλες!!!
— Yanis Varoufakis (@yanisvaroufakis) May 19, 2015
“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.