Rasa from Vilnius, read portal tv3.lt, said that a plate of soup or cold cut in a cafe already costs more than 5 euros.
“In one cafe, a plate of šaltiborščių costs 5.50 euros, and in another, a vegetable soup with meat costs 5 euros, and a spicy lamb soup costs 6.9 euros.
After all, soup used to cost only a few euros, and I could buy a normal meal for 5 euros or more. If the price continues to rise, coffee shops and restaurants will soon become an undeniable luxury,” said Rasa.
Last year, VAT for the general catering sector was reduced from 21 percent. up to 9 percent The aid is provided to help businesses affected by the Covid-19 pandemic.
This year, the Organization for Economic Co-operation and Development (OECD) proposed that Lithuania give up its VAT exemption. The government led by Ingrida Šimonytė is also aiming for this.
However, representatives of restaurants and cafes asked the authorities to extend the VAT exemption. Otherwise, according to him, you can get bankruptcy and higher prices for restaurant visitors.
The concession was requested to be extended for at least one year
The President of the Lithuanian Hotel and Restaurant Association, Evalda Šiškauskienė, evaluated the proposal to refuse VAT relief for catering companies.
“We want to apply to the government and ask to extend the VAT relief for another year. The current situation is complicated. When we think we will recover, the price of energy resources is affected. In addition, the war destroys everything. Foreign tourists do not want to come to Lithuania anymore.
We know, we promised enough to reduce VAT in two years. And it really helps, about 80 percent. restaurants were saved from bankruptcy by VAT relief. However, now all costs are increasing, raw materials are more expensive, salaries are increasing, all deferred taxes have to be paid,” said the representative of the restaurant and hotel.
According to him, VAT relief should be extended for at least one year for restaurants.
“This help is very necessary for restaurants. Otherwise, we can see bankruptcy. Restaurants will not be able to withstand the rising prices.
In addition, in other countries, for example, in Germany, no one thinks about removing these benefits. Many countries have reduced VAT during the pandemic. And with us, it is already big”, commented E. Šiškauskienė.
Donatas Vaitasius, head of the daily lunch restaurant chain “iLunch”, said that during the Covid-19 pandemic, the public catering sector suffered the most.
“Restaurants and cafes are still feeling the effects of the pandemic and will continue to feel it for a long time. VAT relief is applied for a short period of time, companies do not have time to recover. VAT concessions have certainly not compensated for all the losses incurred during the pandemic,” said the head of the company mentioned.
Prices for restaurant visitors will increase
E. Šiškauskienė assured that the cancellation of VAT relief will increase prices for restaurant visitors.
“Inflation will also contribute, so prices will rise.” And it certainly won’t encourage consumption. People will go to restaurants less often”, said E. Šiškauskienė.
D. Vaitasius saw that all restaurant expenses were increasing.
“There was never a time when utility costs in restaurants were higher than rent. But no one is talking about it. I have not heard of measures being taken to reduce the rising prices.
Therefore, it is natural that prices will increase for end users. A business cannot run at a loss or can only do so for a short period of time. Prices for consumers have increased, after all, basic food products become more expensive up to 20 percent in a year. There is probably not a single cost line in a restaurant that does not increase prices. Raw materials, rent, wages, packaging, etc. are more expensive. This increase can only be amortized by increasing prices for consumers,” commented the restaurant manager.
Workers want higher wages
Vytautas Samavičius, manager of Momo grill and Monai restaurants in Vilnius, Kaunas and Klaipėda, said that although the VAT exemption was not removed, prices for restaurant visitors have increased.
“There is no other option, everything is more expensive. For example, a piece of beef used to cost 24-27 euros. It currently costs 39 euros. And the following month, the suppliers announced that the piece would cost 50 euros. And this is just one example. Oil, flour, semolina, potatoes rose in price by about 30-40 percent. And all these prices fall on the shoulders and guests.
Employee expectations are also growing. Everything from fuel to utility bills became more expensive for them as well. For workers, their wages are no longer enough. We wanted to keep our employees, but nothing happened. We don’t talk about profit anymore, we hope to leave at zero“, hopes the restaurant manager.
Restaurant V. Samavičiaus is located in the biggest cities of Lithuania – Vilnius, Kaunas and Klaipėda. However, according to the interviewer, all costs are the same in all cities.
“It’s not that beef or potatoes are cheaper in Klaipėda. The salaries of employees are also almost the same in all cities. Inflation in all cities is the same,” said the restaurant’s manager.