Greece’s austere surrealism: to tax schools or cars?
Following punitive VAT hikes on 40,000 food items on July 20th, the Greek government must find new taxation targets. Tax private schools? That is absurd. Tax cars? But, that is absurd.
On Tuesday, October 20th, Pierre Moscovici responded to a question submitted by two Greek conservative MEPs, Mrs Spyraki and Mr Fortsakis. The question concerned the hike on VAT charges from zero to 23% on Greek private education and tutoring services. The Commissioner specified that Greece’s commitments towards its lenders did not contain such a provision and that the idea “stems from government proposals.”
The European Commission insists on telling Greece that fiscal objectives are carved in stone. But, how these objectives are achieved is a Greek choice. But, all choices left seem absurd.
Greek media sources reveal that the European Commission refused to approve was instituting a reduced VAT rate for private education ranging from 6% to 13%.The “Institutions” insist that taxation of private education will be either 23% or zero. That may sound absurd.
So, the VAT hike looks likely to be 23%. But, the bill that was finally introduced by the Greek government does not cover the whole private education market. There are significant exceptions for non-profit institutions, that is, foreign and embassy schools, religious schools, or other non-profit foundations. In effect, 26 of the most prestigious elite schools in the country are exempt. That too, seems absurd.
Private school owners are complaining this is a measure favoring the upper class to the detriment of the middle class. The media outcry became worse when the Minister of Education, Mr. Fylis, stated that the charge was in fact “peanuts” and that parents opting for private education had to assume to cost of their choice. That statement seemed absurd.
Following an even worse public outcry, the government is now considering to replace the value-added tax on private education with an increase on the taxation of expensive vehicles, including “green technology” vehicles such as diesel and electricity-powered, as well as hybrid cars and motorcycles. That may sound absurd.
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