A recent study by the hoteliers and restaurateurs association concluded that 55.9% of businesses are considering closing their doors next year, while 35.8% of the remainder are thinking about cutting back on staff if the government insists on keeping VAT at 23%.
AHRESP revealed the results of its ‘Employment Study’ last week, having quizzed its associates between September 15 and 30.
The association said: “The conclusions are alarming. If VAT in the restaurant sector is reduced to 13%, half of the respondents actually admitted to increasing employment in 2014, in line with what happened in Ireland which created 9,000 jobs after VAT was reduced to the minimum rate.”
Arguing its case, AHRESP said that an inter-ministerial working group had recently concluded that the VAT rate in the restaurant industry should be 13% in order to help create jobs as per the EU’s recommendation under Directive 47/2009.
“The decision is now in the hands of the prime minister, who will hopefully know what to do and opt in favour of competitiveness and sustainability of the tourist sector, as well as the recovery of our companies and jobs, thus leading to economic growth,” said AHRESP.
However, it appears VAT will remain at 23% after the recently announced measures proposed for the 2014 State Budget (see cover story).
