Latvian restaurants repeat plea for VAT cut on catering

The Latvian Restaurant Society (LRB) and the Latvian Hotel and Restaurant Association (LVRA) repeatedly ask officials to “hear the calls for help from the industry” and to introduce a reduced rate of 12% value-added tax (VAT) for catering services in the budget next year, according to a statement August 3.

Currently, a rate of 21% applies to catering services.

The associations sent their calls to Finance Minister Arvils Ašeradens (New Unity), also informing Prime Minister Krišjānis Kariņš (New Unity) and the Minister for Economics Ilze Indriksone (National Alliance).

"Approximately 85% of the Member States of the European Union currently have a reduced VAT rate on catering services. In Lithuania, the reduced VAT rate of 9% for catering was set during the pandemic and extended until the end of 2023. Such a step in the neighboring country provided substantial support for the sector, as in Lithuania, in Q3 2021, the seasonally adjusted turnover of catering services increased by around 60% compared to the previous quarter," said Jānis Jenzis, president of the Latvian Restaurant Society.

He stated that “a reduced VAT rate would also enable our entrepreneurs to re-establish their competitiveness, to better pay back accumulated tax debts and to preserve and create new jobs, providing adequate wages for employees and reducing the share of the shadow economy in the sector”.

Although currently the turnover of the catering industry has reached a level similar to that of pre-pandemic time, "energy and food prices have also increased significantly and much more, which means that the sector is not able to cover the rising costs," say the organizations.

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