The reduction of VAT on small Greek islands is being interpreted in Turkey as a strategic challenge to the country’s tourism competitiveness, not merely as a fiscal measure.
In a public statement to the tourism outlet Turizm Aktüel, Mehmet Isler, President of the Aegean Tourism Enterprises and Accommodations Association (ETİK) and board member of the Turkish Tourism Promotion and Development Agency (TGA), warns of a potential “structural loss of competitiveness” for Turkey vis-à-vis Greece.
According to the Turkish analysis, Greece’s decision to reduce VAT rates as of January 1, 2026, on 24 Eastern Aegean islands with fewer than 20,000 inhabitants is a highly targeted policy. The standard VAT rate drops from 24% to 17%, while VAT on accommodation and dining falls from 13% to 9%, creating a significant cost advantage compared to Turkey, where inflation in the tourism sector remains high.
Special concern is raised over the yachting sector, as Greek islands are now becoming more competitive in yacht maintenance, technical services, and supplies, challenging Turkey’s long-standing dominance in Eastern Mediterranean marinas.
Mr. Isler also highlights a broader policy contrast: Greece treats tourism as a strategic partner for economic growth, while Turkey largely views it as a source of tax revenue, placing heavy pressure on hotels and investments.
The report concludes that reduced VAT rates on Greek islands represent not only a fiscal decision but a factor with wider economic and political implications in regional competition, underscored by the fact that the Dodecanese islands are now openly discussed in the Turkish press as a cost and competitiveness benchmark.
Source: www.dimokratiki.gr
