The decrease in the VAT value of the restaurant from 23 to 13 percent is already a given and will be included in the State Budget proposal for 2016 that the Government will present shortly.
A measure that the Association of Hotels and Touristic Enterprises of the Algarve (AHETA) «applauds» and which it hopes will be accompanied by «more fiscal boldness».
It was already known that this had been one of the measures negotiated by the PS, PCP and BE, in the process that eventually allowed António Costa to form the Government. Last Monday, Secretary of State for Tourism Ana Mendes Godinho confirmed to Sul Informação that “electoral commitments must be fulfilled” and that this is one of the measures that the Socialist Government will insist on putting in the State Budget.
Good news for entrepreneurs in the sector, who have long called for a drop in this rate, like other living forces in the Algarve, such as business associations, the Tourism Region and local authorities.
«The reduction in VAT on food and beverages contributes, decisively, to improve the working capital of the Algarve's hotel and tourist companies, too undercapitalized by the fiscal asphyxia they were subjected to in the recent past, a direct consequence of the serious national economic crisis and international», considered AHETA, in a press release.
Food and beverages represent «about 30 percent of the average turnover of hotel companies in the Algarve», which corresponds to «about 200 million euros», being even the Portuguese region «where this value is higher».
The crisis that has been experienced in recent years, where the decrease in consumption allied to a great difficulty in accessing credit, has weakened companies, «leaving business structures more exposed to economic conditions, especially if we consider the weaknesses resulting from the greatest weakness sector – tourist seasonality”.
The drop in the VAT value of restaurants will thus be an oxygen balloon for companies.
«AHETA also welcomes the proposals contained in the State Budget regarding the creation of conditions for attracting foreign investment (FDI) in the area of tourism, and it is very much awaiting the introduction of measures aimed at restoring greater fiscal competitiveness in the Portuguese economy in general and the tourism economy in particular», added the Algarve business association.
Despite the praise, this entity also has criticisms to make, «deeply regretting» the fact that the 2016 State Budget does not predict the reduction of VAT on golf, «the product that truly contributed the most to mitigate seasonality, assuming that as one of the main attraction factors for residential tourism and, in this way, for foreign investment in tourism in the Algarve».
«Foreign tourists are responsible for more than 95 percent of golf rounds transacted in the Algarve, more than 1,15 million per year, generating around 75 million euros a year in direct revenue and a multiplier effect of the order of five times in expenses for accommodation, restaurants, commerce, rent-a-car, etc. In other words, around 350 million euros in tradable goods. More than the amount involved, minus 6 million euros of VAT per year, the competitive image of a destination that intends to assert itself in the international context is at stake», considers AHETA.
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