The government will definitely not be cutting the Vat rate on the restaurant sector before the next budget, Finance Minister Tonio Fenech told The Times Business.
Earlier this month European Union finance ministers agreed to allow member states to reduce Vat to 5.5 per cent in sectors such as restaurants as a way of stimulating the economy, a move welcomed by the private sector in Malta which is hoping for a cut to take place soon. The Vat rate in Malta on restaurants is 18 per cent.
Mr Fenech said that now that the EU had approved this reduction in Vat the government will be meeting the MHRA to discuss how this decrease could be brought about. He was adamant, however, that if a reduction were to be made it would be announced in the next budget and would only come about if the government was guaranteed that consumers would benefit.
"Now that the EU has given member states the option of cutting the Vat rate on restaurants we will be talking to the MHRA to share our views on the matter. But a reduction on Vat is not brought about just like that and if we do go ahead and cut the rate it will be announced in the next budget. Furthermore, we will be asking the MHRA to give us a guarantee that consumers will benefit from a cut in the Vat rate. Otherwise such a reduction would not make any sense,"
Mr Fenech told The Times Business.
Malta's budget in usually presented in October or November and any fiscal measures announced typically take effect the following January.
MHRA president Kevin Decesare welcomed the EU's decision to allow member states to cut Vat on restaurants, saying this was badly needed in Malta as a way of stimulating the economy.
"Such a cut on the Vat rate on restaurants is greatly needed and is needed now, today. The economy is what it is and requires all the help it can get. We would like the Vat rate on restaurants to be reduced to five per cent, which is the rate for hotels in Malta.
"The government often quotes an EU study which shows that our restaurants are expensive and considerably increase the cost of a holiday in Malta. So what is it waiting for? Reducing Vat on the restaurant sector would greatly help tourism in Malta," Mr Decesare said.
Mr Decesare said that the MHRA was definitely willing to give an assurance that any Vat reduction would translate into reduced restaurant prices for consumers.
"We absolutely want consumers to benefit from this Vat reduction. If Vat is to be reduced from 18 per cent to five per cent then prices at restaurants will have to be decreased accordingly. We are ready to guarantee this through a scheme similar to Fair when Malta switched to the euro. Consumers will know which restaurants would have pledged to reduce their prices. For the ones that don't it will be a matter of 'name and shame'," Mr Decesare said.
Earlier this month European Union finance ministers agreed to allow member states to reduce Vat to 5.5 per cent in sectors such as restaurants as a way of stimulating the economy, a move welcomed by the private sector in Malta which is hoping for a cut to take place soon. The Vat rate in Malta on restaurants is 18 per cent.
Mr Fenech said that now that the EU had approved this reduction in Vat the government will be meeting the MHRA to discuss how this decrease could be brought about. He was adamant, however, that if a reduction were to be made it would be announced in the next budget and would only come about if the government was guaranteed that consumers would benefit.
"Now that the EU has given member states the option of cutting the Vat rate on restaurants we will be talking to the MHRA to share our views on the matter. But a reduction on Vat is not brought about just like that and if we do go ahead and cut the rate it will be announced in the next budget. Furthermore, we will be asking the MHRA to give us a guarantee that consumers will benefit from a cut in the Vat rate. Otherwise such a reduction would not make any sense,"
Mr Fenech told The Times Business.
Malta's budget in usually presented in October or November and any fiscal measures announced typically take effect the following January.
MHRA president Kevin Decesare welcomed the EU's decision to allow member states to cut Vat on restaurants, saying this was badly needed in Malta as a way of stimulating the economy.
"Such a cut on the Vat rate on restaurants is greatly needed and is needed now, today. The economy is what it is and requires all the help it can get. We would like the Vat rate on restaurants to be reduced to five per cent, which is the rate for hotels in Malta.
"The government often quotes an EU study which shows that our restaurants are expensive and considerably increase the cost of a holiday in Malta. So what is it waiting for? Reducing Vat on the restaurant sector would greatly help tourism in Malta," Mr Decesare said.
Mr Decesare said that the MHRA was definitely willing to give an assurance that any Vat reduction would translate into reduced restaurant prices for consumers.
"We absolutely want consumers to benefit from this Vat reduction. If Vat is to be reduced from 18 per cent to five per cent then prices at restaurants will have to be decreased accordingly. We are ready to guarantee this through a scheme similar to Fair when Malta switched to the euro. Consumers will know which restaurants would have pledged to reduce their prices. For the ones that don't it will be a matter of 'name and shame'," Mr Decesare said.