Parties table VAT cut for cafés and restaurants

ALL POLITICAL sides except ruling party AKEL yesterday proposed a 3.0 per cent VAT reduction for restaurants, in a heated debate at Parliament.

Deputies said Cypriot tourists were being discriminated against with the government’s recently approved deal, which proposes a VAT reduction from 8.0 per cent to 5.0 per cent solely for hotels and tourist packages.

The parties proposed the same reduction for all dining areas, with the exception of alcohol.

But a spokesman for the Finance Ministry said consumers would not benefit from such a measure, while the state would lose €17 million.

DISY, DIKO, EDEK, EVROKO and the Green Party agreed the government was offering favourable treatment to tourists at the expense of locals.

“this measure will be a motive to encourage internal tourism,” said DIKO’s Antigoni Papadopoulou, while DISY MP Maria Kyriacou added, “This is unfair competition; it is discrimination at the expense of Cypriot tourists”.

This was also the position of PASIKA, the Cyprus Association for Restaurant, Bar and Nightclub Owners, whose General Secretary Phanos Leventis said Cypriot customers were not receiving the same benefits as tourists.

He also said that if the law was passed, he would lead the way and start reducing prices, in the hope that other establishment owners would follow.

But AKEL, along with the government, said there would be no benefits from such a measure. “A souvlaki pitta is €5. Three per cent of that is 15 cents. So if this law is passed, the pitta will be sold at €4.85,” AKEL’s Yiannos Lamaris pointed out.

The proposal – which comes just weeks after President Demetris Christofias referred a law back to Parliament suggesting among others the specific tax reductions – will be submitted to the Plenum on Thursday for approval.