Issue link: https://maltatoday.uberflip.com/i/1544097
THE Nationalist Party's proposal to lower VAT for restaurants is in- tended so that they can enjoy the same rate currently charged at ho- tels, Mario de Marco explains. The PN's tourism spokesperson lays out the case for the proposal by pointing to an inconsistency in the current system—food served in hotels is subject to a 7% VAT rate, while the same meal eaten in a standalone restaurant carries an 18% charge. Meanwhile, ready-to- eat food sold in supermarkets is charged at zero per cent. "So, right now you have this dis- tinction between 18% for restau- rants, 7% for food from hotels, and zero for food already cooked from supermarkets," he tells me. "This is creating a bit of an unlevel playing field." De Marco says the proposal did not originate with the PN but has been pushed by industry bodies including the Association of Cater- ing Establishments for a long time. It is also mentioned in documents recently published by the Malta Chamber of Commerce. He also points to Malta's compet- itive disadvantage relative to Med- iterranean rivals such as Greece, where restaurant VAT is set below the standard rate. On whether a VAT cut would ac- tually translate into lower prices for consumers, De Marco acknowl- edged the scepticism. "I hope that where the saving is not passed on to the consumer, it will at least make the operation of that restaurant more sustainable, which means more profit, which means more in- come tax paid to government." He said the measure would be partly self-financing, with any re- duction in VAT revenue offset by increased income tax receipts from more viable businesses. De Marco also links the VAT proposal to improved compliance. He recalled that Finance Minis- ter Clyde Caruana had previously claimed the average restaurant pays only around €4,500 in annual tax. De Marco says this suggests that many operations are barely viable or that the revenue authority's grip on declared income is still weak. A lower VAT rate paired with an effi- cient charging system would bring greater oversight of what restau- rants actually collect. Beyond VAT, De Marco speaks about a range of broader challenges facing Maltese tourism. He argues that Malta, with a tourist-to-resi- dent ratio that is among the high- est in the world, urgently needs to shift its focus toward quality over quantity. He raises concerns about declin- ing average length of stay, financial leakage through foreign airlines and remittances sent abroad by foreign hospitality workers, and the growing impact of short-let plat- forms like Airbnb on residential communities, particularly in Val- letta and St Julian's. Asked what a PN government would prioritise in its first 100 days, De Marco said the immediate task would be to bring all stakeholders around the table, including local communities, not just industry in- vestors. "Tourism does not need shock treatment," he insists. "What it needs is consistency in direction." Mario de Marco: 'Tourism needs consistency, not shock treatment' Mario de Marco argues a reduced VAT rate for catering establishments would boost sustainability, competitiveness and transparency, even if prices may not fall. The Nationalist Party's tourism spokesperson talks to Nicole Meilak 4 maltatoday | SUNDAY • 29 MARCH 2026 INTERVIEW