May 20, 2020 / 4:34 PM / 7 days ago

UPDATE 1-Greece announces VAT tax cuts to support tourism - PM

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ATHENS, May 20 (Reuters) - Greece will cut value added tax (VAT) on transport tickets, coffee and other beverages as part of efforts to revive its tourism sector and the economy, its prime minister said on Wednesday.

Greece, which emerged from international bailouts in 2018 after a decade-long debt crisis, relies on tourism to keep its economy on a recovery track. More than 30 million visited the country last year, about three times its population.

Prime Minister Kyriakos Mitsotakis said in a televised address on Wednesday that VAT on coffee, non-alcoholic beverages and transportation tickets would be cut to 13% from 24% and that direct flights to Greece would resume on July 1.

“There will be sample testing of our visitors and adherence to health protocols, however this will not cast a shadow on our bright sun,” Mitsotakis said, adding that hotels would open their doors on June 15.

Greece said that year-round hotels will open June 1 and that flights will resume from the country’s main airport in Athens June 15.

A list of countries that Greece will restore its connections will be announced later this month. Germany, Israel, Cyprus and Bulgaria would be among the first countries that Greece wants to restore transport links the soonest, Tourism Minister Harry Theoharis said. He said incoming tourists will not need to have a coronavirus test or be quarantined.

So far, the country managed to contain the spread of COVID-19 infections to just 2,850 cases with 166 deaths - low levels compared to other EU countries - mainly by imposing an early nationwide lockdown in March.

But the shutdown will cost its economy dear, a deep recession is forecast this year, possibly a contraction of up to 13%, its finance minister projected earlier on Wednesday. (Reporting by George Georgiopoulos and Renee Maltezou; Editing by Elaine Hardcastle)

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