Greeks grapple with stiff tax hikes as bailout terms kick in

ATHENS, Greece – How much did you say?

That’s likely to have been one of the most common questions in Greece on Monday after a raft of tax increases saw the price of everyday items such as bread and meat rise substantially.

In return for getting a bailout request to European creditors off the ground, the government of Prime Minister Alexis Tsipras has had to enact a series of confidence-building measures, the biggest of which was a steep increase in the sales tax from 13 to 23 per cent.

For an economy reeling from the recent uncertainty over the country’s future in the euro and the government’s decision to impose strict controls on the free flow of money, the rises aren’t going down too well.

Giorgos Kavvathas, head of Greece’s Small Business Association, reckons the tax hikes will burden an average Greek family’s budget by 60 euros ($65) per month.

MORE: Complete coverage of Greek financial crisis

Most successful tax systems depend on one thing more than any other — clarity. The changes Monday have brought up of host of confusions.

Here are a few examples of how much more Greeks are paying on some key items.

MEAT

For lovers of one of Greece’s staple fast-foods — the classic souvlaki — Monday’s changes should not cost you anymore as the sales tax on pork has been left at 13 per cent.

It’s not so easy though. Add some salt, pepper, a few slices of tomato or onion on that skewer and the tax rate shoots up to 23 per cent. That means your favourite souvlaki restaurant will charge you 2.20 euros ($2.40) for an onion-tomato souvlaki stick — an increase of 20 cents. The same goes for chicken. Tax on a plain chicken breast stays at 13 per cent. Add a little cheese stuffing or turn it into schnitzel however, and you get hit with the higher tax.

Beef has got the short end of the stick. It’s taxed at 23 per cent, plain or otherwise. Stavros Perros, head of the country’s Butchers’ Federation, says the price for a kilogram of beef is now up by a euro to 11.70 euros ($12.70) a kilogram.

BREAD

A loaf of traditional bread, just like grandma used to make, still gets taxed at 13 per cent, with prices ranging between 40-70 euro cents per loaf depending on the bakery. That’s pretty straight forward, unless you’d prefer sliced bread with your over-easy eggs for breakfast, or any bread stuffed with olives, cheese or raisins. That’s because “processed” bread is now taxed at 23 per cent.

CAB RIDES

All taxi rides are now more expensive as the sales tax jumps from 13 to 23 per cent. That means that a standard ride from the airport to the heart of downtown Athens at Syntagma Square will set a customer back 38 euros, three more than the rate that ended Sunday. The airport-downtown Athens night rate jumps from 50 to 54 euros.

FERRY RIDES

A ferry ride to majestic Santorini or to party-central Mykonos is now a little costlier to get from the main port of Piraeus. A ticket to the popular island of Paros goes from 32.50 euros ($35.39) to €36.5 euros. Tickets to Naxos and Mykonos also jump respectively by 4 euros to 37.50 and 38 euros.