Greek Lawmakers Object to Abolishing Island Sales-Tax Discount

A group of Greek lawmakers have objected to a government plan to abolish a sales-tax discount enjoyed by some of the country’s more remote islands,

Proposed legislation that would standardize the sales-tax rate nationwide threatens the social well-being of islands in the east Aegean Sea, 19 lawmakers from three parties that support the government said in a letter to Prime Minister Lucas Papademos. The islands need a lower rate to compensate for the higher cost of goods and services, according to a copy of the letter sent by e-mail.

“We do not accept the repeal of a measure that contributes crucially to the maintenance of social cohesion and the sustainability of our islands,” the lawmakers said. “We call on the government to expend every effort to avoid it.”

Tax revisions are among the measures that the European Commission, International Monetary Fund and European Central Bank have demanded as a condition for a second Greek financial bailout. Papademos was appointed in November as head of an interim government that was charged with securing 130 billion- euro ($171 billion) in aid.

To contact the reporter on this story: Antonis Galanopoulos in Athens at agalanopoulo@bloomberg.net

To contact the editor responsible for this story: Maria Petrakis at mpetrakis@bloomberg.net

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