Nationalist Party supports reducing the VAT rate for restaurants and hotel services to 7%

The proposal is part of a strategy for the tourism industry’s post-pandemic rehabilitation.

During a news conference in Gozo, Nationalist Party (PN) senior spokesperson Peter Agius and candidate Ivan Castillo stated that the PN supported lowering the VAT rate for hotel services and restaurants from 18% to 7%. This was one of the key ideas among the 100 contained in document ‘2 + 8 A Strategy For Tourism Recovery’ that includes a number of initiatives aimed at alleviating the tourist sector’s lower turnover as a result of the epidemic. The PN also proposes a plan in which the tax is repaid over a five-year period.

According to Agius, a VAT rate reduction is achievable through derogations permitted by European directives. The lower rate may encourage new investment at a time when the tourist industry needs a boost to recover to pre-pandemic levels of economic activity. “We will only be able to remain competitive if we continue to invest,” Agius added.

Castillo noted how hotel investment serves to broaden the Maltese tourism offer, and the PN plans include address direct funding for hotel improvements as well as the development of niche market hotels aimed at certain sectors. According to Castillo, the PN is also proposing that the government be the primary partner in targeted marketing, with a €25,000 refund of marketing costs. A new Nationalist administration is enforcing a ‘Standard of National Aesthetics,’ which encourages the steady development of attractive urban areas that will provide visitors visiting the Maltese islands with a one-of-a-kind experience, he added.

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Ivan Castillo, PN candidate, and Peter Agius, PN senior spokesman, conducting a press conference in Gozo.