Portugal is considering decreasing the VAT rate for restaurants from 23% to 13% in its 2014 budget. The working party report on this matter disclosed on Friday by the government, said that putting restaurant VAT back down to 13% would be beneficial for the economy, but said additional measures would have to be found to make up the loss in tax revenue.
Portugal wants to follow countries like Greece, where restaurant VAT was reduced to 13% and Ireland where the 9% VAT on entertainment has been retained in the recent budget.
This VAT reduction would need permission from the EC, IMF and the ECB if it is to go ahead. A review of Portugal’s progression towards exiting the bail-out will be dealt with in the summer of 2014.