At the same time Athens announces it plans to raise VAT rates on some holiday islands, Andreas Andreadis, head of the Confederation of Greek Tourism (SETE), is appealing to the 2.4 million British tourists who have already booked their summer holidays in Greece to use their credit cards for as many payments as they can.
“What we are saying is that on cash transactions above a certain level please use your credit cards,” Andreadis told the Observer.
“That way it forces services and shops to declare it on the cash register and issue receipts.”
“In a country where the tax collection system is so inefficient, credit cards are the easiest way of clamping down on evasion,” he said stressing that “around 40 per cent of receipts are not issued in tourist areas to avoid VAT.”
The government specifically plans on introducing a higher VAT rate on the most popular Greek islands as the numbers of vacationers set to visit the Mediterranean country are expected to reach record levels.
Twenty five million foreign arrivals are to flood the Greek islands – more than twice the country’s population.
Islands including Mykonos and Santorini are bound to receive a major surcharge on hotel rooms, services and goods, something that has been firmly opposed by the tourist industry.
“While there is a certain logic to it, you cannot impose a new levy in the middle of the season when 60 per cent of package holidays have already been paid,” Andreadis explained.
“It is a desperate, last-minute measure that has been without plan or strategy and under panic of not getting the next tranche.”
The new VAT raise is estimated to cash in 350 extra much-needed million euros to ensure Greece meets its autumn payments to the International Monetary Fund (IMF).
On 12 May, the IMF is expecting to receive two loan instalments reaching 780 million euros.
At a time when Greece is losing up to 20 billion euros due to tax evasion every year, according to finance ministry reports, taxpayers owe in excess of 70 billion euros to the state.
Tax evasion remains not only one of Greece’s major financial drains but the tourists industry’s main policy for decades.
The chief of tourism and the SETE confederation, which represents more than 50,000 enterprises in the sector, are pressing for consumers to be given incentives to use cards. They urge visitors to use their credit cards following prime minister Alexis Tsipras’ suggestion that electronic payments should be made mandatory for transactions exceeding 70 euros.