Portugal’s hotel, restaurant and catering enterprises are being encouraged to hike their prices fully to reflect the 23% rate of VAT, part of which currently is being adsorbed by the businesses.
If the VAT rate stays at 23% in the 2014 budget, which it set to do, the full amount will be passed on to customers.
At the end of a meeting of the Advisory Board of Portugal’s Association of Hotels and Restaurants (AHRESP), its Secretary General, José Manuel Esteves, said that if the national budget for next year is approved as is, then "from December enterprises are free to pass on the VAT that so far they have been absorbing.”
"We live in a free market and can not say whether prices rise or fall, it will depend on the management of each business establishment" said the president of AHRESP, Mário Gonçalves Pereira.
The Advisory Board also has decided that members should from now on clarify on their price lists and invoices the total VAT burden being charged to the end customer.
Esteves explained that software is already being prepared to show "detailed information on all the menus and price lists and on the final invoice, the selling prices and the VAT element." The aim is that 'Portuguese and foreign customers see the price" i.e. which part of the total is for the product and how much is being charged in VAT.
Pereira said that the association will hold meetings with parliamentary groups in the National Assembly before November 30th and said he is optimistic about the possibility of moving the VAT level back down to 13%, warning that if the VAT rate was held at 23%, the Advisory Council will plan protests, "if the tax remains at 23% we will decide what forms of struggle to adopt."
The AHRESP is upset that the government "has not heard the recommendations of the EC Directive which clearly says, reduce VAT and boost jobs.”
José Manuel Esteves said Portugal’s government is "deaf and blind to studies showing that the government was losing tax revenue by increasing the rate of VAT.” According to the Association, the restaurant and catering sector lost 20,000 jobs in 2012 and continues to shut down businesses. Meanwhile the Government rejected proposals that would have created 50,000 new jobs by 2014.
