The word in Lisbon is that the VAT reduction for restaurants is only on sales of food, not on accompanying wine, beer and spirits.
The country’s restaurateurs had pinned their hopes and investment plans on a reduction in both aspects of a good meal but the government, under early pressure from Brussels to fill a €700 million income gap, may be trying to weasel out of its pre-election promise.
A tight-lipped spokesman for the Association of Hotels, Restaurants of Portugal (AHRESP) said that the final government position on the VAT reduction will be announced by the Prime Minister on March 1st.
The VAT reduction will come into play on July 1st, as detailed in the 2016 draft State Budget and the Association is to set up a joint monitoring team which will present information at the end of 2016 - the weak response reflecting the delicate position the Association is in.
According to reports circulating on Thursday evening, drinks will remain at 23% VAT with the exception of milk, coffee and bottled water which will go down to 13%, along with food.
Spirits, wine, beer, soft drinks and packaged juices will stay at 23% which will reduce the ‘VAT loss’ for the year, originally estimated at €175 million.
The general secretary of the National Association of Spirits Companies, Mario Moniz Barreto said he hoped the government did not go the other way and raise VAT, which remains a possibility faced with disgruntlement in Brussels.
The pre-election Socialist Party did promise that VAT for restaurants would drop to 13% but of course nobody said when, while letting people assume the change would be as of January 1st, 2016.
