Calls to Lower VAT for Catering and Tourism

By , 17 Jul 2020, 11:37 AM News
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July 17, 2020 - Following the example of other European countries, Montenegro should reduce the rate of value added tax (VAT) for catering and tourism, thus helping protect four thousand businesses and safeguard tens of thousands of jobs, says Social Democratic Party (SDP) MP, Raško Konjević.

Konjević believes that the catering and tourism sectors particularly are in need of immediate help, so that they can redirect a proportion of VAT to the payment of costs, salaries and utilities.

"It is the right time to follow the example of other European countries and take a step that will help protect four thousand businesses and tens of thousands of jobs in Montenegro," Konjević said in a statement.

He added that the SDP's proposal to reduce VAT for catering and tourism was in line with changes in Europe.

"Many countries on the European continent, in their desire to help their tourism economy, have introduced measures ranging from favorable loans, consumption subsidies, through cheques and vouchers for citizens, to rent and tax breaks," Konjevic said.

However, the most significant assistance received by the hospitality and tourism industry is reflected in the reduction of VAT on services, led by the United Kingdom and Austria, which reduced the rate from 20 percent to five percent, while Lithuania and Bulgaria have reduced rates from 21 percent to nine percent.

"VAT rates have been reduced in Belgium, from 12 percent to six percent, on Cyprus from nine to five percent, in the Czech Republic from 15 to ten percent, while Greece, as a Mediterranean tourism superpower, has reduced VAT rates on accommodation and catering from nine to five percent," highlighted Konjević.

He added that Montenegro has the largest share of tourist services in terms of GDP of all the aforementioned countries, but that the Government refuses to accept the SDP's proposal to reduce VAT in the catering sector from 21 percent to seven percent.

"This temporary measure would go a long way to help four thousand of our catering businesses survive the challenging year economically, saving businesses and jobs," Konjević concluded.

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