An Alternative Proposal for VAT on Consumption in Greece

G Kalliampakos, E Kotzamani

Abstract


It is well established that a reduction in consumption VAT rates during an economic crisis, followed by the introduction of a single VAT rate rather than multiple rates, may significantly increase tax revenues through improved collectability of VAT due to increased consumption as well as reduction of tax evasion and avoidance. This paper presents the economic impact on the Greek economy of the establishment of a basic VAT rate of 20 per cent for most consumer goods and services, with a reduced VAT rate of 10 per cent for certain socio-economically important goods and services.

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