Turkish government has decided to cut VAT in the tourist sector from 18% to 8%, the Greek site “Imersia” reported, quoted by the Bulgarian News Agency (BTA).

Experts in Ankara think that by reducing the VAT rate demand in the tourism sector will grow by 21.12%, but the International Monetary Fund, which monitors Turkey’s economy, disagreed with this decision warning it might have negative consequences and reduce public revenues.

Turkey’s finance minister Kemal Unakitan said lower VAT was not against the economy stabilization program, submitted in IMF by the ministry.

Tax rates in the tourism sector in other countries such as Italy and France are lower than in Turkey, the minister also said calling the government’s decision to lower VAT a natural reaction, which will enable Turkey to compete with other countries.

Tourism in Turkey is booming. In April alone the country was visited by 1.5 mln foreign tourists verus 1.3 mln in the same month in 2006.