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Tax incentives are now more than necessary

04 October 16 | Jason Perdios
Jason Perdios

COMPANIES

IBI Group

Consultant - GREECE

Savills

Consultant - GREECE

Solum Property Solutions

Consultant - GREECE

ETAD.A.E.

Public entity - GREECE

PEOPLE

Antulio Richetta

Director IBI Group
Greek tourism industry faces the risk of falling into a disinvestment orbit unless the state offered tax incentives, Iason Perdios, chief executive of Louis Hotels told Greek news agency.

 

In  an interview, Perdios noted that high taxation combined with high social insurance contributions and constant changes in tax legislation were the basic factors of discouraging would-be investors to build new hotels in the country, creating new job positions.

Perdios, CEO in one of the largest hotel groups in Cyprus and Greece, operating 21 hotels (12 in Cyprus and 9 in Greece), said that when a businessman decided to make an investment based on bank borrowing, drafts a 15-year sustainability plan, but with constant changes on tax legislation this plan is annulled.

"How is it possible the state to come and punish tourism with a 24 pct VAT on restaurant services and 13 pct on overnight stay when these rates in other countries are between 5.0-9.0 pct?" Perdios said, adding that Greece has the global originality of imposing taxes on national products, such as wine and ouzo.

"You buy ouzo at 2.65 euros per two litres from the supplier and you pay 12.35 euros, of which 9.70 euros goes to state coffers as tax. You punish your country in multiple ways. First, the producer, secondly the consumer and third your own country that goes out of competition," he said.

He said that labour cost in Greece was very high as social insurance cost reached 41 pct when in Cyprus it was 19 pct.

"All these are incentives for undeclared labour. In Greece, unfortunately, only large enterprises and group of companies pay the bill at a huge cost for their businesses which deprived them of the ability to move forward with larger investments," he noted.

Perdios said that high corporate taxes (currently at 29 pct) was another wound and stressed: "Are all these incentives for anyone to invest in tourism in Greece?" he asked.

He noted, however, that the outlook for bookings in 2017 is positive for Greece and Cyprus, as the two countries are considered safe destinations.

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