Sweden considers VAT cut for restaurant meals

Sweden's government said it plans to cut VAT on restaurant meals in its 2012 budget, a measure worth 5.4b krona (£500m).

The proposed cut in VAT to 12% from 25% for restaurants and catering services has been a long-stated goal of the minority government and is part of a package of measures to create jobs for young people worth 7.5b krona (£700m).

"The proposal is expected to increase employment, reduce administrative costs and cut prices in the restaurant sector," the government said in a statement.

If Sweden goes ahead with the cut it would be the latest in a long line of European countries to introduce cuts to VAT to help the hospitality sector. In July, Ireland dropped VAT for all goods and services related to tourism to 9% until the end of 2013.

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By Neil Gerrard

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