Page last updated at 16:43 GMT, Friday, 8 January 2010

Greece raises taxes on alcohol and tobacco

Bottles of ouzo
The increase in tax will be more significant for spirits

The Greek government has announced increases in taxes on alcohol and tobacco as it seeks to counter the country's debt crisis.

For most drinks, tax per litre of alcohol will rise from 11.4 euros (£10.23) to 13.7 euros with immediate effect.

Tax on a pack of cigarettes will rise from 57.5% to 70% on 12 January.

The Finance Ministry said the measures would increase revenues. The government has ruled out increasing VAT.

Value added tax currently stands at 19%.

The Finance Ministry also said the increased taxes on alcohol and cigarettes would deter consumption, "to the benefit of public health".

As taxes on drinks are levied according to alcohol content, the rise will be more significant for spirits than for wine and beer.

Greece's debt has reached 300bn euros, the highest level in its modern history.

Prime Minister George Papandreou has already announced major cuts in public spending as he tries to reduce the country's debt.

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