Caterers say cheers to a PN promise

Caterers on Friday welcomed Alex Borg's pledge to lower VAT on catering services from 18% to 7% within the first 100 days of a PN government. 

The Association of Catering Establishments said in a statement that it had been pushing for this proposed measure for the past five years.

The PN had proposed a 7% VAT rate for hotel services and restaurants in 2021 as part of a post-pandemic recovery plan for the tourism industry.

It reiterated its proposal last year, with Borg saying on Sunday the party would put the measure in place within the first 100 days of a PN government.  

Restaurateurs have been pushing for the government to slash their VAT rate from 18% to 7% for years, but Clyde Caruana recently told a Times of Malta event the measure would cost the country €80 million. 

The average restaurant pays just €4,500 a year in corporate income tax, less tax than many citizens, the finance minister had noted. 

On Friday, ACE invited the Opposition for talks on its promise, saying it wanted to better understand the way such a measure would be introduced within the announced time frame.

It added that it was holding similar discussions with the government to determine the best way to introduce such a measure.

ACE said it agreed with the recent comments by Tourism Minister Ian Borg that any meaningful reform in this sector required a holistic approach - one that involves careful coordination with the fiscal authorities, including the VAT Department and the Finance Ministry, as well as a broader review of licensing, compliance, and operational structures. 

The association reiterated that while such a measure would be primarily aimed at supporting the catering industry, the end consumer would be an indirect beneficiary.

"ACE stresses the need for common sense on the matter and to avoid turning the debate into any local party’s political agenda. Such an important matter merits a constructive discussion between all parties concerned to ensure the well-being of the industry".