This country slashes VAT for benefit of various tourism businesses
Cyprus has temporarily reduced VAT charges from 9% to 5% for hotels, restaurants and taxi transport. The move is intended to support the tourism industry with a boost in revenues – but the reduction is not likely to be passed on to the customer, the Cyprus Mail has reported.
The rate reduction will be applicable for the period from July 1, 2020 to January 10, 2021.
The change only applies to the following services, according to Deloitte Cyprus:
a) Accommodation in hotels, tourist accommodation and similar areas, including the provision of holiday accommodation
b) Restaurant and catering services.
c) Transport of passengers and their accompanying luggage inside the Republic by urban, intercity, and rural taxis and by tourist and intercity buses.
Tourist industry representatives said that the change would be helpful. “This is a welcome measure of support, one which will bring in extra revenue,” commented Philokypros Roussounides, the director general of the Cyprus Hotel Association.
Cyprus’ hoteliers and restaurateurs are not raising prices; they are rather working to provide incentives for tourists. At several Cyprus hotels interviewed, room prices were being reduced and upgrades to better rooms were on offer.
The main goal of this policy is to give tourism and travel-related businesses some breathing space and to boost their revenues – thereby also boosting employment.