After a decade of lobbying the government and many promises on behalf of the president, the French restaurant industry has finally been able to significantly reduce its value-added tax.
President Nicolas Sarkozy made a pledge during his election campaign two years ago that he would reduce VAT for restaurants, cafés and bistros from 19.6 to 5.5%, yet the change only materialised this Wednesday July 1st.
The VAT reduction was approved by the EU earlier on this year and comes at a time when France is experiencing its worst recession for 30 years. The restaurant industry needs significantly more custom to keep it from going under entirely.
It will be the choice of restauranteurs whether they employ the new lower rate. For business owners like Laurent Dissidi, it's hard to tell just yet if there will be a change in customers' dining habits:
“We've been asked to lower prices, we're playing the game and we'll see. In six months, we'll be able to assess and see if it was good or bad.”
Yet, Stéphane Archambault, a waiter for over 30 years, was optimistic about the changes:
“With people spending less time on lunch, the community spirit of French eating has been broken. But with the price cuts, people stayed longer today, some even ordered a digestif. It's a good thing for waiters, who are generally struggling. We could see wages rise.”
The VAT cuts will cost the French state 2.38billion euros annually.