Minister backtracks on tripling restaurant VAT

Minister backtracks on tripling restaurant VAT
Photo: John Evans
French food lovers and the nation's restaurant owners breathed a collective sigh of relief on Wednesday after Finance Minister Pierre Moscovici backtracked on threats to almost triple the tax on eating out.

Under plans unveiled on Tuesday, value added tax (VAT), on food served in bistros, cafes and restaurants will be levied at 10 percent from January 1, 2014, up from the current rate of seven percent.

But officials caused further dismay in the food world by refusing to rule out applying the standard rate, which is going up to 20 percent, in the long term. Such a move would mean a tripling of the rate from the current level.

Faced with an outcry from the powerful restaurant lobby – which says a VAT increase will destroy jobs – Moscovici on Wednesday insisted there were no such plans. 

"The restaurant rate will be 10 percent," Mosovici said. "I stress 10 percent and not 20 percent. Nobody is looking at putting restaurant food back on the standard rate."

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