The VAT rate on restaurants and catering has had a ‘positive impact’ of €180 million, according to a delighted Secretary of State for Fiscal Affairs.
Paul Nuncio was speaking on the last day of debate on the 2014 state budget and accused the opposition socialists of using ‘wrong numbers’ in its analysis of the impact of the rise in VAT from 13% to 23% in 2012.
The socialists agree with research commissioned by the association of restaurateurs’ that concluded the impact of the VAT rise was a negative €850 million when factors such as mass business closures, subsequent dole payments, bankruptcy proceedings leading to unrecoverable taxes, and suicides were put into the equation.
“Contrary to the socialists who, in denial of the reality that the financial impact of this measure was not negative for the state, but was positive, based thrie arguments on erroneous estimates that have been circulating in the past two years," said the Secretary of State.
Paul Nuncio stated that "the objectives of fiscal consolidation were achieved despite leftist parties continuing to preach data that is not true."
When a tax rise puts half of the contributors out of business, yet raises marginally more than before, this is seen as a good thing by the current regime. The socialists argue that it is better to have more people gainfully employed, with the tax at a lower rate, as the social consequences of tens of thousands of restaurant workers losing their jobs is not helpful to society as a whole.