The Portuguese restaurant industry is set to shrink dramatically as the country is forced to slash subsidies and tax breaks in order to keep up with rising prices.
A survey by the industry body that represents more than 100,000 restaurants in the country has found that only 7.8 percent of restaurants have received any subsidies, compared with 13.4 percent in 2010.
In addition, only 10 percent of establishments are exempt from VAT, while only 12 percent have been able to deduct sales tax.
A new report by the Chamber of Restaurants has warned that Portugal will face a severe shortage of restaurants, especially in small towns, as the government and private companies have been pushing through cuts in subsidies.
“We have already reached a point where the number of restaurants is declining, and we cannot afford to go back to where we were before,” said Joao Mário, vice president of the chamber, who said the numbers would drop further as the subsidies were eliminated.
The government has promised to slash the cost of food in the coming year, but it has been unclear if this will come in the form of lower prices or higher prices in the market.
In December, the government slashed subsidies for food by 20 percent, but this was later reversed.
According to the survey, the main reasons for the shrinking numbers were: the increase in VAT on food; the lowering of tax rates; the elimination of subsidies; and the introduction of new taxes.VAT is the government’s biggest tax revenue source, and is collected from restaurants that are either selling food directly to consumers or selling to restaurants.
However, the VAT on the sale of food is lower than what is collected in VAT, which is what has led to many businesses deciding to lay off workers and shut down in order not to be forced to pay VAT.
The Chamber of Restaurant’s report, which was based on data from the country’s Ministry of Economy, says the VAT tax has decreased by 9.5 percent since 2010, and that the VAT rate has fallen by 20 to 25 percent since the first quarter of 2018.
The VAT rate on food sales was reduced to 1.50 percent in 2018 from the current rate of 3.00 percent.
The VAT rate also fell by 5 percent in 2020.
According to Máoro, this was because the VAT reduction is not just in the restaurants, but also in other sectors as well.
For example, he said that while the number and size of the VAT inspectors has decreased, there was also an increase in the number who were being paid more for their work.
This also resulted in businesses being able to charge higher prices for their products.
“In the short term, the price increases are being reflected in the increase of VAT on sales, and the decrease of VAT tax,” he said.
VAT tax on food has been the main reason for restaurants closing, but Máero says that in the long term, many of them will be able to survive because of the new tax rules.
“The government is going to have to spend a lot of money to make the market more competitive, and this is what we will have to accept,” he explained.
Meanwhile, the Chamber’s research found that restaurants that had opened in the previous two years have closed due to lack of support.
Many of the businesses in the city of Recife, the second largest in Portugal, are closed due the fact that the tax on their food has fallen so far in 2017.
In 2017, it was 5.9 percent.
This year, it is only 2.9 per cent.
“This year we have no more room for improvement, because the economy is struggling.
There is no way to make any more money, so the market is already collapsing,” said Carlos de Oliveira, owner of one of the countrys most famous restaurants, Oliveira’s, in Recife.”
We are losing our customers.
We cannot keep this going.”
Mário told ESPN Clic that his association has asked the government to create a tax system for restaurants that will allow for the elimination or reduction of VAT.
He said this would be the only way that restaurants can survive.
“To get rid of VAT, you have to go beyond the existing tax system.
It will be very difficult to create the tax system that allows for the closure of restaurants,” he told ESPN.