The Portuguese Government is set to to reduce VAT on restaurant food to 13 per cent in its next budget.
According to newspaper Expresso, both alcoholic and non-alcoholic beverages will continue to be taxed at 23 per cent, with the exception being milk, coffee and bottled water, which will also change to the lower rate.
This means that the government’s election pledge to restore pre-austerity VAT levels for Portugal's beleaguered restaurant sector will only be honoured in part, as a result of pressure from Brussels.
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According to Ministry of Finance sources, the measure will be part of the Budget that the Government will present to Parliament on February 5. It should enter into force on July 1.
The general secretary of the National Association of Spirits Companies (ANEBE), Mario Moniz Barreto, expressed hope that the government will also reduce the VAT on beverages soon. He added that any increase in VAT is "bad for the both the industry and the State, which continues to lose revenue".
© 2016 Hospitality Ireland by Branislav Pekic.