PN government would lower VAT rate for restaurants, other hotel services from 18% to 7%

The Nationalist Party has proposed lowering the VAT rate for hotels and restaurants to seven from 18%.

The existing rate of 7% on accommodation only would be extended to all other hotel services and, most importantly, to restaurants which now purchase and invoice at full VAT rate.

The party has also proposed that the tourism sector would be allowed to pay owed taxes over a five-year period.

More proposals for the tourism sector were announced on Friday by PN chief spokesperson Peter Agius and election candidate Ivan Castillo.

The proposals, they said, aim to encourage new investment by the private sector.

Some of the proposals aim to alleviate the effects of the downturn in business as a result of the pandemic.

Agius explained that the decrease in VAT is permissible under EU directives. A reduced rate would encourage new investment during a period where the sector needs signs of encouragement to return to pre-pandemic levels. Only if we invest can we remain competitive, Agius said.

Ivan Castillo said that investment in all types of hotels leads to the diversification of our tourism product. The PN is proposing direct support for the upgrading of hotels, as well as the promotion of ‘concept hotels.’

A PN government would also be a partner in targeted marketing, where it would reimburse up to €25,000 in marketing expenses.

Other proposals include the introduction of a National Ethics Standards that would promote the gradual creation of “picturesque” urban zones while protecting the unique character of Maltese villages and cities.