Drinks industry rejects Central Bank comments and calls for VAT reduction

Abstract

'Evidence based decision making rather than opinion is required'. Makhlouf scepticism on VAT rate reduction fails to consider the impact of a temporary VAT reduction on on-trade alcohol sales (in pubs, restaurants and hotel bars), according to the drinks industry. Group seeks VAT rate reduction on sales of alcohol as temporary and targeted measures which is in line with Central Bank boss advice to Government for targeted support measures for business ahead of July stimulus package. The measure is being sought as a business support measure rather than a demand stimulus - VAT savings would be held by businesses to reduce costs. Call comes as just 20% of the schemes in place to support businesses have been drawn down. A VAT rate reduction on on-trade alcohol will deliver targeted support to thousands of businesses, protect up to 22,500 jobs and get people back to work, says industry. As of 1 July, Austria has reduced the VAT rate on on-trade alcohol from 20% to 5% temporarily as a Covid response measure to support business.