12 Sept 2021
Greece’s Economy to Grow 5.9% this year, New Tax Relief for Businesses
The Index Today
Greek Prime Minister Kyriakos Mitsotakis announced that the economy is expected to grow by 5.9% this year after going through an economic slump amid the covid pandemic. He also introduced the provision of tax cuts and relief measures to help businesses and households affected by the pandemic.
The covid pandemic has affected Greece’s tourism industry the most in the last year. It remains one of the many nations which rely heavily on tourism for economic growth. The country has previously experienced a ten year financial crisis which came to end in 2018.
Kyriakos Mitsotakis said, “Today we are announcing the revision of the growth target for 2021 from 3.6% to 5.9%. Our country is stronger today than it has been in many years. It is stronger economically, it is stronger geopolitically. It image abroad has changed.”
The government will keep the lower 13% VAT rate for tourism, cinemas, gyms, coffee and soft drinks to offset price hikes in essential goods and transport. 150 million euros have been allocated to provide subsidies for electricity bills and heating facilities for poorer households.
Corporate tax is expected to decrease from 24% to 22% next year whereas new small businesses will gain a 30% tax reduction for merging. The country’s economy exceeded the forecasted growth by 3.4% the second quarter. This has enabled the government to implement needed tax relief programs to boost local business activity.
According to experts, the sudden growth is seen as lockdowns ended across the region and covid measures became less strict. The country’s tourism sector was particularly hit hard with only 7 million visitors as compared to 33 million in 2019.