French Chefs Create Giant Stir (Fry) Over Unfair Tax Regime

Lisa Ugur, Tax-news.com, London

07 March 2001

Those travelling in and out of France at the beginning of the week must have been bemused to find disgruntled French restaurant owners, complete with chefs hats and whites, blockading the Channel ports and border crossings in protest against an unfair tax regime which hits traditional restaurants.

The trade union of French restaurateurs, the UMIH, warned last week it would block some 20 crossings in protest at the country's value-added tax (VAT) rates until the government agreed to discuss their particular bete noire. The restaurateurs complain that traditional restaurants are are being crippled by the 19.6 per cent rate of VAT levied on meals, and want a reduction to 5.5 per cent - which is the rate applied to take-away food and other food-related industries such as supermarkets.

By Monday morning, hundreds of protesters had set up blockades causing traffic jams at English channel ports and a heavy backup at toll stations of major road crossings with Germany, Spain, Belgium and Italy. In many cases they wre joined by removal van drivers, themselves angry that high VAT on their own industry invites cowboy operators and threatens their job security.

The UMIH said one reason it was targeting border crossings was because French restaurateurs were losing trade to rivals in neighbouring countries where VAT rates are standardised for all restaurants. A spokeswoman for the union said: 'Spain is at seven percent, Italy and Portugal at five percent, the European Commission is in favor of us moving on to a reduced VAT rate. Only the finance minister is blocking it.' Jacques Privat, also of the union, told local television: 'Every Sunday you can see that the restaurants on the French side of the border are half-empty because everyone crosses to Spain to eat, where VAT is half ours. We are dying'.

However Finance Minister Laurent Fabius has ruled out any cut in VAT for restaurants, telling parliament in October that it would cost France FFr 20bn a year and was against European regulations. As chefs began to set up camp at the borders this week, finance ministry officials said no meeting with the protesters was planned.

Recommended