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“Hundreds”of restaurants close down due to crisis

by INÊS LOPES [email protected]

An average of one restaurant a day closes down in Portugal, according to the Association of Hotels, Restaurants and Related Businesses in Portugal (AHRESP).

In January and February alone, 52 insolvencies were registered in the restaurant sector, 68% more than in the same period in 2011 (31 insolvencies) and 174% than in 2010 (19 insolvencies).

But the data is only referring to insolvency cases published in the official government publication Diário da República and the AHRESP believes the number is far from reality as hundreds of restaurants are believed to have closed down already.

The president of AHRESP, Mário Pereira Gonçalves, says the “real test” will be in May, when businesses have to pay VAT relating to the first quarter of the year “and they find there isn’t the money to meet their obligations”.

Meanwhile, a petition initiated by AHRESP is asking the government to review the VAT rate for the restaurant industry and put it back to 13%.

The association says the sector is being strangled by the VAT rate and the eventual revision of the tobacco law, which is more restrictive (see Algarve Resident, January 13 edition).

The AHRESP, which recently met with the President of the Republic Cavaco Silva to express its concerns, predicts that 20,000 businesses will close and 47,000 jobs will be lost during 2012 and 2013 as a result of the tax increase, which “does not serve the interests of the country nor its tourism industry”.

Although the high tourist season hasn’t started yet, a significant reduction in the number of customers is already being felt by restaurant owners, who say more people are opting to take lunch boxes to work and eating in to save money.

It says the fight will continue and for 2013 it will propose the reduced VAT rate of 6% for the restaurant sector.

To sign the online petition for the revision of the VAT rate in the restaurant sector, go to

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