VAT on alcohol goes down but who’s likely to actually reduce their prices

RESTAURANT owners expressed their satisfaction yesterday on the reduction of VAT on alcoholic beverages from 15 per cent to eight per cent, hoping that the measures would be put into practise islandwide and maybe giving businesses a boost.

According to the Ministry of Finance, only places that serve food will be able to serve alcoholic drinks at the reduced prices, regardless of whether someone orders food or not. Pubs, clubs and other places of entertainment that do not serve food are subject to the standard VAT rate of 15 per cent. Takeaway food with an alcoholic drink is not included in the reduced rate.

With the recent reduction, drinks that would cost €20 previously would now be €18.60, seven per cent cheaper.

Despite the reduction, the question remains as to whether restaurant owners will in fact reduce their prices.

Phanos Leventis, general secretary of the Cyprus Association of Owners of Entertainment Centres (PASIKA) said that the reduction would bolster both the tourist industry and the entertainment industry.

“I want to believe that colleagues all over Cyprus will honour this reduction and offer it to their customers,” said Leventis. “There will be no increase in the food we sell despite the five per cent increase on food products, because what we pay we’ll get back in the meantime,” he added.

Speaking to employees and owners at several popular Nicosia restaurants, it appeared that they were not even aware of the seven per cent reduction.

President of the Cyprus Consumer’s Union and Quality of Life, Lucas Aristodemou was doubtful as to whether restaurant owners would be changing their prices downwards, even if they were more aware of it.

“No one’s interested in even informing the restaurant owners and consumers,” said Aristodemou. “The next problem is who will check them and who will the consumer report them too?” said Aristodemou concerned.

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