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United List urges residents to support proposal for reduced VAT rate on restaurants

Saeima opposition party United List is calling on residents to support an initiative to reduce value added tax rate for restaurants to 12 percent.

“Latvian restaurants have been meeting with ministries and different task forces for seven years, but their appeals have always fallen on deaf ears. Everyone claims to support a reduced VAT rate of 12 percent on catering, but so far they have only paid lip service to the idea,” United List says in a statement.

This week, the citizens’ initiative will be discussed at a meeting of Saeima Economic, Agricultural, Environmental and Regional Policy Committee. This development is welcomed by Saeima member Linda Matisone (United List), who earlier invited representatives of the restaurant industry to a meeting of the Shadow Economy Combatting Subcommittee.

United List points out that in Lithuania, a reduced VAT on catering has helped curb the shadow economy and the industry’s turnover has doubled. The number of jobs has also increased, while companies’ equity has improved.

“It is not catering companies that owe taxes to the state, it is the state that owes to the catering industry. Latvia is one of only three European Union countries that has not supported restaurants and other caterers with a reduced VAT rate, neither now nor during the pandemic,” said Matisone.

The pandemic, the war in Ukraine, inflation and the country’s insufficient tourism marketing have created a critical situation in the catering industry, and several popular restaurants with a long history have recently left the market, notes United List. The political association also emphasizes the industry’s social function, as it employs many young people and low-skilled workers.

United List claims that the Finance Ministry opposes the proposed solution, even though the ministry has been unable to offer any alternative to support the industry.

According to United List, more than 12,000 citizens have signed a petition calling for a reduced VAT on catering services on the Manabalss.lv public initiatives portal.

Source: BNS

(Reproduction of BNS information in mass media and other websites without written consent of BNS is prohibited.)

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