GREEKS POISED TO FACE SHARP PRICE INCREASE AMID TAX HIKES

A man walks in front of the ATM of a Greece National Bank branch in Athens, July 19, 2015. (Photo: © AFP)

Greece, 5 Shawwal 1436/21 July 2015 (MINA) – People in cash-strapped Greece are poised to witness sharp price hikes as Athens is levying higher value-added taxes (VATs) amid the lingering financial crisis in the country.

According to a directive taking effect on Monday, the VATs will jump to 23 percent from the current 13 percent, applying to products and services from sugar and cocoa to taxi rides and funerals.

However, the government will reduce taxes on medicines, books and newspapers from 6.5 percent to 6.0 percent, Press TV quoted by Mi’raj Islamic News Agency (MINA).

According to Greek media, the crisis-hit country is expected to gain 800 million euros (867 million dollars) in tax revenue by the end of the year.

The hikes are part of an unpopular austerity package and reform measures that Athens adopted last week. The tough fiscal package was required by Greece’s troika of international lenders – the European Commission, the International Monetary Fund (IMF) and the European Central Bank (ECB) – in exchange for a new three-year bailout package to avoid bankruptcy.

Meanwhile, Greek banks reopened on Monday after a three-week shutdown, which, according to estimations, has cost the economy some 3.0 billion euros (3.3 billion euros) in losses.

However, money transfers to foreign banks remains inactive and people are not allowed to open new accounts.

The leftist government of Prime Minister Alexis Tsipras has agreed to raise taxes, overhaul the pension system and carry out privatizations in order to receive a bailout of up to 86 billion euros (94 million euros) over the next three years. (T/P010/NMT)

Mi’raj Islamic News Agency (MINA)