Finance Ministry denies alteration to IVA

THE MINISTRY of Finance has denied that it is considering the abolition of the intermediate rate of IVA, the tax levied on the restaurant and hotel trades, wine and coffee, among others. A spokesperson for the ministry said press reports warning of an impending change were “pure speculation”. According to Jornal de Notícias, those items deemed essential goods could see their tax reduced from 12 per cent to five per cent. But the tax rate on the remainder would be raised to 19 per cent. Tourist associations have always sought a reduction of the levy to seven per cent, the current rate in Spain, because they claim that this would boost their competitiveness. The president of the Association of Restaurateurs and Caterers, Mário Pereira Gonçalves, said further increases in IVA would be “catastrophic for a sector already in the throes of a crisis”.