Greece to extend levy on oil companies, make VAT cut permanent

Greece will extend a windfall tax on energy companies to support low-income pensioners and make COVID-era VAT cut on coffee and taxi permanent, Prime Minister Kyriakos Mitsotakis said on Thursday.

Greece has been battling with a cost-of-living crisis and despite an economic recovery after a decade of pain, wages are still below the European Union average, while food prices were up more than 20% in 2022-2023 from the previous year.

"I think it's a move of social justice," Mitsotakis said during a radio interview, days after he reshuffled his cabinet following a worse than expected EU vote result.

Mitsotakis expects revenues of about 300 million euros ($321.66 million) from the 33% windfall tax on oil companies this year, which will be used for a special one-off subsidy for low-income pensioners at the end of the year.

Greece first introduced the tax on its oil refineries and other energy producers in 2022 to help households with their monthly food and energy expenses amid high inflation. It has since raised more that 3 billion euros from the duty.

Mitsotakis also said on Thursday that the low VAT of 13% on take-away coffee and taxis, introduced in 2020 to support economic activity during the COVID-19 pandemic, will be now permanent.

($1 = 0.9327 euros)