Around 200 representatives of the hospitality sector staged a protest outside the government office in central in Vilnius on Thursday to protest against the VAT increase that came into effect at the beginning of this year.
Against the backdrop of funeral music, the protesters were treating passers-by to pumpkin soup and warm drinks, inviting them to a symbolic funeral reception with tables covered with black tablecloths and baskets of funeral flowers with black ribbons on them.
Next to them stood the flags of Lithuania, Latvia, and Estonia, marking the solidarity of the protest in all the Baltic states.
“Restaurants are now closing one after the other, and we already had 50 bankruptcies in the first half of this year. There are many more bankruptcies registered, and this is just the beginning, as we are still in the season and fall and winter are coming,” Evalda Šiškauskienė, head of the Lithuanian Association of Hotels and Restaurants, the organiser of the protest, told BNS.
There placards seen at the protest demanded a 9 percent VAT rate for the hospitality sector.
“This is our plea to the new government since the previous one failed to hear us, to bring back the 9 percent VAT rate as has been done all over Europe. The European VAT average for the hospitality sector is 9 percent,” Šiškauskienė said.
“The profitability of restaurants is now 0.17 percent, according to the latest statistics, so they now practically barely break even and are left with barely anything once they pay their taxes,” she added.
Gediminas, who runs a small catering business, says that if taxes are not reduced, his business might close.
“It’s a very small business, and I can say that taxes are really affecting everyone and, of course, earnings are decreasing. [...] We barely break even,” he told BNS.
According to the State Data Agency, the turnover of restaurants, cafes, and other catering companies in Lithuania amounted to 1.056 billion euros, excluding VAT, in the first eight months of the year, an annual drop of 7.3 percent.
The standard 21 percent VAT rate was re-introduced for the hospitality sector in January this year, going up from the 9 percent rate that was put in place in July 2021 to help the sector hit by the coronavirus pandemic.
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