Restaurateurs call for continuation of the VAT reduction for the industry

The reduced rate of value added tax for hotel and restaurant services should remain in place as an anti-crisis measure. This is what branch organizations in Plovdiv insist on. The lower VAT rate for restaurants and bars in Bulgaria is in effect until the end of 2021.

Krastina Mitkova is the owner of a restaurant in Plovdiv. During the pandemic, with the money saved from the lower VAT, she managed to cover the most urgent expenses and pay salaries. In Bulgaria, the VAT rate was reduced from 20 to 9%.

The business also meets the support of customers, but they in turn hope for better service.

"I would not say that the quality has changed, but they should survive... these establishments. I think the lower tax rate should remain in place," said Vanya Sotirova.

The Bulgarian Hotel and Restaurant Association points out that in Germany, for example, this anti-crisis measure will continue to be in effect next year as well. If the previous VAT rate is returned to Bulgaria, the industry predicts bankruptcies, because in order to re-open restaurants, a large number of the owners have made loans.

"Some say- we did not feel a reduction in food prices in restaurants. On the other hand, however, a lot are moving out of the gray economy, which is no less important. So this is the right step in this direction and if the legislator finds this courage to support the will of the people, the lower VAT rate for restaurants should continue to be applied, " Eng. Lyubozar Fratev from the Tourism Council in Plovdiv said.

The branch organizations are of the opinion that the lower tax will lead to higher revenue collection.