Estonian hotel, restaurant association wants tax moratorium for sector until end of 2021

  • 2020-03-30
  • BNS/TBT Staff

TALLINN - The Estonian Hotel and Restaurant Association has proposed that the government grant a tax moratorium to the tourism industry and apply a zero VAT rate to accommodation and catering services until the end of 2021. 

The association's board chairman Peter Roose said that for the accommodation and catering sector business has come to a halt, tourism was hit by the crisis first and will recover the longest. Ninety-five percent of accommodation establishments and restaurants across Estonia have closed their doors and 98 percent of employees are at home.

The association proposed to lift the fringe benefit tax applicable to catering service and enable businesses to adjourn the payment of labor taxes interest-free until the end of next year. Besides,  reducing the personal income tax by half should be weighed.

In addition, the association wants the government to immediately set out a new measure alongside the existing remuneration reimbursement measure for compensating employees for foregone pay to prevent a massive wave of layoffs.  

According to the association, that would give the operators of businesses that have lost more than a quarter of their revenue a feeling of confidence at last for a year. Both the existing and the new measure must apply to all employees for whom businesses have paid unemployment insurance contributions, regardless of the form of employment relationship.

“In current discussions among participants in the sector it has been mentioned that in the present situation, of the sector's 30,000 workers some 50-70 percent would have to be made redundant by the end of the year the latest," the association said in a letter to the government on Thursday.