Fast food chains won’t benefit from VAT cut, Restaurant Union says

Fast food chains could not access the VAT reduction from 18% to 8%, the Union of Restaurants assured after the recent announcement of the law. Ministry of Economy and Finance (MEF).

A memo from the MEF, published by the Gestión newspaper, warns that this reduction in VAT by Congress could mainly benefit large companies, including franchises.

Nonetheless Union Restaurant He disagrees with the ministry’s statement and considers the arguments unrealistic.

“Major fast food chains do not qualify as a small company because, as we all know, they are considered medium to large companies. Therefore, we consider this statement to be completely incorrect and even malicious, ”the statement says.

Union representative José Luis Silva also noted that food chains to which MEF treats an invoice of more than SGD 5 million per month, so they do not fall within the range of up to SGD 7.82 million per year that they must generate in order to qualify for the VAT reduction.

Another opinion against

The Foreign Trade Society of Peru (ComexPerú) also opposed the VAT cut approved last month.

As they pointed out, the project, which reduced the IGV for restaurants, hotels and tourist facilities from 18% to 8%, is not a measure that benefits small businesses. Business or the tourism sector.

“This is a measure that is not going in the right direction,” ComexPerú said.

Based on data from Sunat, he warns that out of 114,000 taxpayers of the above articles, more than 50% do not pay VAT, as they belong to the Single Simplified Regime (EU).

However, they point out that it will not benefit 200,000 restaurantshotels and tourist facilities, the initiative claims.

MEF Arguments

The law defines micro enterprises as enterprises with annual sales of up to 150 UIT (690 thousand Singapore dollars), and small enterprises – with sales of up to 1700 UIT (7.82 million Singapore dollars).

According to the memo FEM filtered out, this would make the rule more beneficial only to “large companies”, including those from middle and high socioeconomic backgrounds, as well as large franchises.

While it has been assured that between 170,000 and 200,000 restaurants will benefit, the IEF indicates that around 62,000 businesses will not see this VAT reduction because they are under the Uniform Simplified Regime (RUS), under which they are not currently eligible. pay VAT.

In addition to this, the ministry warns that this measure will reduce the collection taxes at the level of 460 million Singapore dollars per year.