Greek Finance Minister Supports Aegean Islands Taxation Reform

Greek Finance Minister Euclid Tsakalotos said that the way to help people who had material problems on the Aegean islands was not via VAT, but via growth, stressing that the country "cannot have multiple VAT rates, we need a common policy for all areas."

MOSCOW (Sputnik) — Greek Finance Minister Euclid Tsakalotos on Friday defended the government's decision to scrap the discounted rate of value added tax (VAT) on the Aegean islands, which was recommended by Greece's international creditors.

Last week, the Greek parliament approved a law on new austerity measures covering actions, on which Brussels' monetary aid to Greece are conditional. In particular, the law provides for the use of state property for the purpose of debt servicing, as well as new taxation regulations, including the rise in VAT on the Aegeans to a common state level.

"This is one of the points, the few points on which I agree with lenders," Tsalkalotos told the local ANT1 television.

He added that the way to help people who had material problems on the islands was not via VAT, but via growth, stressing that the country "cannot have multiple VAT rates, we need a common policy for all [areas]."

On Tuesday, Eurogroup finance ministers held marathon talks on new loans for debt-ridden Greece, finally agreeing on a 10.3 billion-euro ($11.5 billion) aid package. The Eurogroup welcomed the adoption by the Greek parliament of most of the previously agreed reforms for the first review, which in most part guaranteed the tranche. Following the approval of the deal, Tsakalotos said it could contribute to the country's eventual economic recovery.