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France cuts food tax

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France cuts food tax

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The government in France is hoping a move to cut taxes for restaurants and cafes will help boost business and create jobs.

After years of lobbying by Paris with its European partners, value added tax on restaurants and cafes is finally dropping from 19.6 to to 5.5 percent. The tax drop comes into effect after a deal was hammered out with EU partners in March following a seven-year campaign by successive French governments. As part of the agreement, restaurant trade bodies have agreed to create some 40,000 new jobs. However the Opposition and some consumer associations say there is no guarantee that restaurant and cafe owners will lower their prices. Many are hoping the move will help lure more customers to restaurants in these times of crisis as France’s summer tourism season starts.