He left open the possibility of reducing VAT on a range of products for the containment of the accuracy, the Minister of Development and Investment Adonis Georgiades, speaking last night on Mega and the show «Big Picture».
The minister said the government is considering reducing the VAT rate on specific products, adding that this is a measure currently under investigation in order to intervene through tax relief on certain types of products and to stem the inflationary wave the country is experiencing.
More specifically, he said: «We've put an exercise in the household basket to see where it's going to fluctuate over the next few months. We're working to see where we're going to have the biggest increases in the next period of time, so we're working to see if we can intervene through taxation in certain areas, so that we can alleviate this inevitable inflationary wave. The possibility is open for this measure, if we see that the increases are excessive, to take additional measures to control the surge. I assure you that the government and the Prime Minister personally are on top of this issue, as they are on everything. We have left no one alone and no one to their fate... We are doing the exercise on the household basket to look at the measures we can take to make this less painful. We all realize that the next 2 to 3 months will be difficult in the area of accuracy.»
Recalled that, yesterday, the political leadership of the Ministry of Development and Investment had a teleconference with representatives of supermarkets to address the price increases in key products and will hold a teleconference with major suppliers, ie basically with the major food industries, in view of the announcements by ELSTAT.
It is noted that on 13 January, the ELSTAT's announcements on inflation for December 2021 are expected and there will be a clear indication of the price trend. In the meantime, however, as the minister said, consumers are already facing a new cycle of price increases, which the government is trying to manage.
However, based on what was mentioned in yesterday's teleconference and the Minister himself conveyed to MEGA, retail chains and suppliers in the past period tried to absorb, as much as they could, the increases, mainly coming from raw material and energy, while the scope to absorb further increases has been exhausted, especially due to energy costs, which in terms of operating costs for supermarkets reaches 20% of the total cost bill.
According to information, market representatives, said yesterday in the teleconference, that now energy costs have tripled and therefore they asked for the extension of the government energy subsidy measure for the next months of the year while they also raised the issue of raw materials e.g. the increase in aluminium by 45% which increases the cost of packaging, the increase in oil by 45% which increases the cost of transport, and the soaring gas prices.
Support measures
The Minister also referred to the existing support measures against the spread of coronavirus. He explained that the government will decide on support measures according to the length of time businesses have been affected by the music ban and the restricted opening hours. Georgiades said that during the week the government will reassess the epidemiological situation to decide whether to lift the measures that place restrictions on businesses. More specifically, he said: “we had a meeting on the measures. We will have it again in two days after looking at the epidemiological situation. It would be a blessing if we could lift the measures especially the ban on music and working hours at the end of the current season, which is January 16. Whether this will be feasible or whether it will have to be extended until the end of January will be something we will know within this week depending on the epidemiological picture we have over the next two days. Depending on the decision we take on this measure, the support measures for the affected businesses will then depend on it.”
