They pointed out that in a bid to help lift the ailing economy, Greece's budget for 2011 includes minor tax cuts, including a reduction in the VAT rate on tourism services to 6.55% from 11%.
Meanwhile Bulgaria is planning to introduce a flat 9% value-added tax (VAT) in the tourism sector as of the beginning of April this year.
The move comes in response to the demand of the European Union that Bulgaria should harmonize tourism VAT, which currently stands at 7% for organized groups and 20% for individual tourism.
Greece is the greatest destination for Bulgaria's short break fans, who would rather find their pleasures closer to home and whose batteries take longer to recharge.
At least until last year a holiday in Greece sometimes was even cheaper than in Bulgaria. The only time when tourists had to dig deeper into their pocket was when they wanted to satisfy their vices and buy cigarettes and alcohol.
All the measures that the Greek government implemented in a bid to combat the crisis, particularly the hikes in VAT and fuel, dealt a heavy blow to the country's tourism sector and it was even forced to swallow a very unpopular move – a decrease in prices of the tourist packages offered.
The decrease in prices though is not a decision for everyone as the smaller, family hotels, which represent the spine of Greece's tourism sector, will see their profits shrink even further. That's the reason why companies opt for keeping the prices, but offering bonuses together with the packages.
Sofia News Agency
http://www.novinite.com/newsletter/print.php?id=123882
