UKRAINIAN RESTAURANT ASSOCIATION WELCOMES A VAT RATE REDUCTION PROJECT FOR THE RESTAURANT SECTOR
The Ukrainian Association of Restaurateurs welcomes Bill No. 5590 amending the Tax Code in order to reduce the rate of value added tax for the catering sector and catering services from 20 to 7%.
According to the association, around 63% of restaurateurs polled by it expect business development thanks to the reduction in VAT, and 19% of respondents intend to reorganize into an LLC if such a modification of the code is adopted.
âEating establishments often use the individual entrepreneur system to sell food and the LLC system to sell alcohol. This creates a number of difficulties for restaurateurs themselves – the inability to maintain civilized and transparent relationships with banks in terms of obtaining loans, the limitation of cashless payments with retail chains, the complexity of the administration of the tax payment process, âsaid Serhiy, president of the Ukrainian Restaurant Association. said Trakhachev.
âToday the industry itself is very demanding for a transition to a civilized and transparent form of existence. But this demand is limited by a significant tax burden, in particular the need to pay VAT at the standard level of 20%, âhe said.
Thus, the adoption of the changes will increase working capital in the restaurant industry and save jobs. According to the association, due to the coronavirus pandemic and quarantine restrictions, the volume of the catering market in Ukraine in 2020 decreased by a third and amounted to 14.1 billion UAH, almost all market players have reduced their income.
RESTAURANT SECTOR, RESTAURANT ASSOCIATION, VAT RATES