The new VAT incentives for the sports, gastronomic and cultural sectors are gaining ground: they were approved by the Seimas Business Committee

The members of the Seimas BFK approved by consensus the new temporary VAT benefits after listening to the opinions of the representatives of these sectors and the Presidency.

If approved by Seimas, the benefits would be valid for a year and a half, starting in 2021. July to 2023.

During the meeting, the president of the Seimas BFK Mykolas Majauskas stated that the support to the companies during the last 13 months amounted to 3 billion LTL. 100 million euros. € 1 billion, the budget of which would be lost due to the new incentives, is not a large amount.

“If we want to have a result when the business recovers, we have to make decisions today. 100 million 3,000 million euros may seem like a huge amount, but compared to 3,000 million euros. They are tears,” said M. Majauskas.

Certain, 15 minutes already Experts wrote about these proposals that they see risks, as other sectors may start claiming VAT benefits, as more sectors are affected. These signs were already present at the Seimas BFK session on Wednesday, during which potential benefits for tour operators or food products in stores were raised. And some companies have expressed the hope that the temporary benefits offered will become permanent.

Restaurants: relief would give hope

Representatives of the catering industry who welcomed the VAT rebate said at the Seimas BVK session that restaurants closed for almost half a year are currently desperate: they are strangled by the rental costs of the facilities and do not receive the subsidies. promised.

Evalda Šiškauskienė, president of the Lithuanian Association of Hotels and Restaurants, said that re-considering the VAT deduction is more relevant than ever, since 34 thousand people work in the restaurant sector. workers.

“Subsidies are being distributed slowly, rent compensation has not been renewed, which is a huge blow to restaurants. 50 percent will be thrown into complete bankruptcy by businesses as they balance on the brink. 21 countries in the EU have long and temporarily introduced this VAT rebate, ”said E.Šiškauskienė.

Arminas Darasevičius, co-owner of the two restaurants, emphasized that the VAT relief would be a hope that would encourage work.

“Also, now is the time to say how important the world of gastronomy is for Lithuanians, because we are small and we will fall faster than the big ones. Insufficient support, huge losses are accumulating, so we will all fall, and the culture of quality restaurants will go down 20 years ago. How will we be in the Baltic region? ”Said the renowned chef.

Another celebrity chef, Tomas Rimydis, who runs a small restaurant, said he does not receive any support from the state.

“I own a small business, we will start counting 6 months when we are closed. And the situation is that there is no support from the State. Zero euro cents apart from the employee subsidy, which is intended for employees, not companies. . The future is hazy, a lot of reflection on what awaits us when we open. And if we open in summer, what awaits us in autumn. There are several thoughts, perhaps to change the field “, – T. Rimydis agreed that VAT relief would give a colleague hope.

Speaking about the need for such a VAT relief, Gediminas Balnis, director of the restaurant chain Amber Food, emphasized that the VAT relief could not be temporary, but permanent.

Event organizers: 400 hanging events

Representatives from other sectors, who are also being considered for VAT relief, also spoke about the sad situation.

Valdas Petreikis, director of the event industry association, which unites 43 event organizers, ticket distributors and arenas, said his industry is completely desperate. If restaurants or hotels can still operate to some extent, then the event planners business has stalled 100 percent and there is no plan or vision in sight to come out of quarantine.

“Bankruptcies will begin when the events are allowed and when the events that need to be suspended must be implemented: 400 events and millions of unpaid euros. When it is necessary to implement them, companies will face high service prices, waste of resources, reduced consumption and many requirements that will have to be implemented, ”said a representative of the event organizers.

Other event organizers who spoke added that without VAT relief, Lithuanian companies are not competitive, as ticket sales are subject to a zero VAT rate in Latvia and 6% in Poland.

And Gintaras Plytnikas, member of the Lithuanian Film Show Association and director of Forum Cinemas, recalled that cinemas that have not run for 8 months a year must maintain large facilities.

“On March 31, the Lithuanian film market and my company were down by 87 percent. And that whole period is unlimited; we don’t know when we will be able to park and live off the reserve, savings or loans,” he said.

Other benefits are also mentioned

During the meeting, the president’s adviser, Vaidas Augustinavičius, stated that the Presidency welcomed the discussions on complex business support measures, but recalled that many sectors had also been affected by the pandemic. For example, last year, revenue from the travel organization sector fell the most, by 75%.

“The benefit is focused on three sectors, but it is important that no one is forgotten,” said V. Augustinavičius, adding that it is important not to leave behind the smallest and smallest who are not VAT payers.

However, M. Majauskas recalled that the EU Value Added Tax Directive does not allow the application of VAT relief to tour operators.

During the meeting, it was repeatedly mentioned not only about the VAT rebate for the tourism sector, but also for food products in stores. Social Democrat Liudas Jonaitis pointed out that the VAT benefit circle under consideration is expanding and suggested that it be applied even more widely.

“A week ago we started talking about restaurants, yesterday about others: artists, sports, culture. Tomorrow we will talk about the activities of the travel organizers. We see the number of these victims, who have suffered a lot, so everyone should reduce this VAT ”, considered L. Jonaitis.

He also recalled that the visitors to the restaurants were wealthy people, so he suggested considering VAT relief for essential food products.

“Maybe VAT should be applied to basic food products. We go to stores, we buy goods, we pay VAT, we all produce, but the people who will use the services of the restaurants will be the most subsidized. We still have to think about not separating branches commercial separate from that benefit, think about how to subsidize the majority of us, because the consumers who will not use that benefit will suffer the most, ”said L. Jonaitis.

However, the conservative Antanas Čepanonis objected to the need to choose the most important and recalled that the amounts of deposits accumulated by Lithuanian residents in banks are enormous.

“It would not be appropriate to talk about reducing VAT in retail chains,” he said.

Meanwhile, Vytautas Mitalas, representative of Freedom Faction, said that the idea of ​​preferential VAT is neither a panacea nor an impossible solution to criticize, but in these circumstances it is necessary.

“It is possible to think cynically, maybe these benefits are not for those who need support the most, maybe they go bankrupt a lot and others take the new benefit. What will happen when it expires in 2023 or the price of the program increases? Difficult questions, but my vote in favor of the VAT relief.

It does not replace or will replace subsidies to the most affected companies. Subsidies and VAT rebate for two different birds, the subsidies must reach the companies. A VAT rebate is required to assess that covid the situation is not a sprint, but a marathon ”, said V. Mitalas.