VAT reduction in tourism and hospitality sector fell to 9 per cent from 13.5 per cent today
Earlier this month, Finance Minister Pascal Donohue announced the rate cut in a bid to help businesses in the region, which have been hit hard by the impact of the Covid-19 regulations.
This reduction will apply to catering and restaurant services, tourist accommodation, cinemas, theaters, museums, historic houses, open farms, amusement parks, some printed items, and hairdressing. This change is effective from today until December 31, 2021.
Minister Donoho said it was presented in recognition of the unprecedented challenges facing specific sectors of the economy.
“The reason I chose the start date is November 1, so I am introducing this step as soon as possible to allow existing businesses to benefit,” he said.
I understand that many businesses are now closed and open ones are operating at significantly lower capacity. In the hope that our economy and society will be able to return to some kind of naturalness, I set this low rate until December 2021 to provide significant additional support to businesses throughout December 2021.
He said the move would benefit 14,600 businesses based on 2017 figures for the number of VAT traders in the 9% sector.
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“Employment in the residential and food services sectors fell from 181,000 in the second quarter of 2019 to 128,000 in the second quarter of 2020,” he said, referring to specific areas most affected by the epidemic and health controls.
However, about 122,000 workers in the sector joined the PUP in June. Although the number of PUP claims dropped from 122,000 to 90,000 by mid – October, the impact of the pandemic continues to be significant. ”
He said the move was part of the government’s economic response to the epidemic, including the wage subsidy scheme and the Kovid control support scheme.