Restaurants' VAT cut from today

TODAY sees the start of the national reduction of VAT on restaurant prices – although many establishments have had reduced prices in place for several weeks.

Eating out should become cheaper as the tax drops from 19.6% to 5.5% in many restaurants – it should mean an 11.8% cut in price, with a main dish at €15 dropping to €13.20.

Restaurants have also had to pledge to cut the price before tax of at least 10 identified products such as an espresso, plat du jour, menu plat-dessert etc to benefit from the reduction in VAT and the Consumer Affairs Department says it is already checking to make sure this is being done.

Big chain restaurants have already implemented the cuts with the likes of Buffalo Grill and Hippopotamus cutting prices on up to 30 plates.

Those taking part can put up a sign saying "La TVA baisse, les prix aussi" (VAT is cut, prices too) – but there is no obligation on restaurants to take part.

Some say they cannot afford to cut prices or they will have to reduce staff.

However, the government says that although the move will cost €2.35billion in lost taxes the intention is to increase business and create more than 40,000 jobs, including ones for 20,000 young people part-time.

One third of the VAT cut is supposed to help pay for the price cuts with another third going to increase staffing. The final third should go to improving restaurant facilities.

The CGT-Commerce union questioned the claims about job creation, saying there were already 60,000 unfilled jobs in the industry.
Photo: Cancre