The reduction of VAT on coffee and non-alcoholic beverages from 24% in the 13% for five months it is not expected to produce any tangible benefits for consumers.
indeed, much of the catering professionals show a reluctance to pass the VAT reduction total (9%) in the list prices, which from the first indications is more evident in companies that have coffee.
Catering professionals say there is little room for improvement in product prices, noting that in the past their companies had absorbed the increases in both VAT and the special tax on coffee and it is now difficult for them to further reduce their prices..
There are no incentives
As professionals in the field explain, if the demand for coffee and non-alcoholic beverages was high and consumption was comparable to last year's, then companies would reduce VAT on their catalogs. However, if demand moves at anemic levels there is no incentive for that.
After all, what was true last year with the reduction of VAT on catering is indicative of what will apply this year as well., during the five-month VAT reduction period.
VAT on catering may have been reduced last year 24% in the 13%, however, in many cases consumers saw no difference, as entrepreneurs took care to raise prices, thus putting the difference in their pockets. In the food retail trade, the reduction of VAT from 24% in the 13% led to lower prices on the shelf about 9% , just in 1/3 of the products. These reductions have largely disappeared today.
The most typical case is what happened to the skewer. Before the reduction of VAT, the souvlaki with pie and gyros cost 2,90 euro (with VAT 24%). After the reduction of VAT on 13% found to cost again 2,90 euro, although it should have been reduced to 2,64 euro. The skewer straw before the VAT reduction was costly 1,60 euro, price at which it remained, while it should have been reduced to 1,47 euro.
With today's data the reduction of VAT from 24% in the 13% will have more tangible results in the prices of non-alcoholic beverages. So, the Coca Cola box from 0,57 euros in the supermarket will be available for 0,52 euro, namely 5 minutes cheaper. However, this reduction does not make a difference to the consumer's pocket.
Coronavirus Restaurants: It is reduced by 24% in the 13% VAT throughout the focus, what will happen to accommodation, transport
It's a matter of hours before the tax returns - and not only that- measures that will support the "sensitive" sectors of Tourism and Catering, with information stating that the scales are carefully weighed #CORONAVIRUSRESTAURANTS #MYKONOSRESTAURANTS # https://t.co/sFBop4MSZX pic.twitter.com/XBJKRs9dZH
- Mykonos ticker (@ mykonosticker1) May 19, 2020