Matthew Xuereb
Joint study on lower VAT for restaurants
A joint committee formed by the Finance Ministry and the Malta Hotels and Restaurants Association is evaluating the impact of slashing the VAT charged by restaurants from 18 to five per cent.
The MHRA has long been calling for such a cut because, in its view, it would lead to more disposable income and stimulate the economy while helping restaurants retain present employment levels.
In a meeting with Labour leader Joseph Muscat, MHRA president Kevin DeCesare said the study's first results were expected within two months.
Mr DeCesare said the tourism industry was facing a challenging time when occupancy levels and room rates were on the decline. In view of the economic situation, there was little that could be done but there were other matters that could be tackled but were ignored.
He said the "basic fundamentals" of the tourism product, such as cleanliness and noise pollution, were not being addressed: "I hope that one day those in power will get on with it".
Dr Muscat said he agreed these were difficult times, yet one should not be discouraged.
The country had to look beyond numbers and at injecting more money into the economy to obtain positive results.
He reiterated Labour's stand in favour of a reduction of VAT on restaurants, saying this could be a stimulus to the industry, especially as restaurants had committed themselves to passing on the reduction to consumers. The reduction should be implemented as soon as possible, even if just on a trial basis for a limited period.
During a conference on the cost of living on Saturday, Finance Minister Tonio Fenech was sceptical about this reduction and questioned whether restaurants would really put prices down to the benefit of their patrons.
Dr Muscat said Labour would continue to call for a ceiling on water and electricity tariffs and fuel and a freeze on administrative fees and licences at 2009 levels.
He said Labour agreed that Gozo be declared a tourism zone but he hoped businesses in certain localities on this island, which were not considered tourist zones, would not be made to pay contributions to the Malta Tourism Authority.
On the water and electricity tariffs, Mr DeCesare said some hotels, especially in the five-star sector, were seeing increases in their utility bills of between €100,000 and €120,000.
He said it was important to see the whole picture and not just look at tourism arrivals. Room rates were down by at least 35 per cent and the length of stay had also decreased, he pointed out.
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Matthew Borg
Jul 22nd 2009, 09:16
I don't agree on lowering the VAT for restaurants & hotels cause only the restaurant owners will benefit from it. I am quite sure that restaurant owners won't lower the prices for their customers and won't even increase their employees pay. In addition to that, I also believe that lowering the VAT only for them would be discriminating towards other types of businesses. To conclude if this change happens it will only result in the owners pocketing more money. I think that the goverment should help the employees and not restaurant & hotel owners that already earned their fair share of money.
Mario Abela
Jul 21st 2009, 20:34
That will be the day, when restaurants decrease their prices!
Do you remember when, upon entry to the EU, the Lm1 tax on foreign wine was removed? Can anyone name one restaurant that reduced its wine price list then?
c. camilleri
Jul 21st 2009, 18:36
How many restaurants give a fiscal receipt? Very few indeed especially those family owned.
A. Vassallo
Jul 21st 2009, 16:40
@ Tonio Fenech and Kevin DeCesare
The joint committee formed by the Finance Ministry and the Malta Hotels and Restaurants Association should see that the reduction in Vat from 18% to 5% charged by restaurants and hotels goes in the pockets of the customer.
Something similar to FAIR should be introduced so that we (the customers) can be sure and feel confident that we will pocket the 13% VAT reduction on food and beverages and not the hoteliers and restaurateurs, and the few get richer and the many get poorer.
A. Xuereb
Jul 21st 2009, 12:57
Are these people serious? Has it ever occurred to any of them that it's not the VAT that's the problem but the prices they charge? Dining out is something i really enjoy but I'm doing it less and less frequently in Malta. I get so frustrated when I see the prices some restaurants set. And let us not start with the service that most places offer too. Talk about a rip off!!!! And with the wages restaurants pay in this country they should really be ashamed of themselves!! The government should reduce the taxes on essential things such as fuel not this!! I was recently in Vienna which is considered a really expensive city, and a 3 course meal in a nice restaurant cost me much less than it does here in some average restaurant. What a joke!!!
N.Farrugia
Jul 21st 2009, 10:57
Unfortunately many hoteliers are not to be trusted. They are always blaming others for negative results. Mr.DeCesare, it seems, did not mention to Dr.Muscat that the government was instrumental for the banking moratorium and the grant being given to hoteliers to help them improve existant facilities. The MHRA imitate Oliver Twist always asking for more!!
r ferriggi
Jul 21st 2009, 10:08
maybe while we are at it,,, can we also study SOMETHING that will assist the common man in the street who works for 8/9/10 hours and is struggling with a normal to lower wage cannot even dream of going out to eat in restaurants??
fine,,, help industry and help restaurants but what about the common workers?
ah,,, we can leave that for the candy tax cut before the election.
M Buhagiar
Jul 21st 2009, 10:07
So PN apologists say it is not a solution to lower vat, like their government used to say, also stating that there is no need to study about lowering VAT for restaurants. Now they are studying the impact. Is this not a U-Turn?
Matthew Bezzina
Jul 21st 2009, 09:22
Whilst acknowledging that little is being done by the relevant authorities to fix the litter issue, Kevin DeCesare should have a good look at the backside of his 5 star hotel. The place has become a public convenience, and the undeveloped premises in the same 5 star hotel is subject to vandalism, alcoholics, rubbish dumping and again the most favoured place where one can relieve himself/herself after a night out. All this because the 'management' of this so called 5 star hotel failed to barricade the entrance to these unused premises. This not to mention the trees that haven't been pruned since the hotel opened its doors, which again act as an excellent place were litter can settle comfortably for a couple of months or so.
If every tourist establishment had to maintain its outside area, things would be much better but unfortunately this is not the case as they are afraid that the minuscule extra cleaning costs would hurt their pockets.
Kevin DeCesare…before complaining, check how your establishments are contributing to ensure that the ‘basic fundamentals’ of tourism are of an acceptable standard!