Restaurant Association urges government to compensate part of catering companies' losses

  • 2020-11-09
  • LETA/TBT Staff

RIGA - The Restaurant Association has submitted a number of proposals to the government that is currently working on support mechanisms for the hospitality industry during the Covid-19 pandemic, which suggest partial compensation for a fall in catering companies' turnover and reducing the value added tax for the industry for at least eighteen months after the state of emergency is over, the Restaurant Association's President Janis Jenzis told LETA.

During the state of emergency, the catering industry's turnover will fall steeply and companies will not be able to cover all costs, which is why the Restaurant Association proposes state compensation for the reduction in catering companies' turnover, which could be set at, for instance, 75 percent of their turnover in July-September, said Jenzis.

The association also wants VAT for catering companies to be reduced for at least eighteen months after the state of emergency is over because the impact of the crisis on the hospitality industry will continue for at least another twelve months after the state of emergency ends.

A reduced VAT would give catering companies the opportunity to recover and prevent losses to associated companies - utility companies, food producers, transport companies and others - that they will sustain if large numbers of catering companies are declared insolvent.

The association also recommends resuming downtime payments so catering companies would not have to lay off their employees. Likewise, the association proposes that the government give catering companies at least 36 months to settle their tax liabilities, said Jenzis.