Lowering the VAT rate for Portugal’s restaurant sector on July 1st appears to have done wonders for employment levels as according to the Secretary of State for Tourism 45,000 new jobs were created in the tourism sector up to September, more than half of them in restaurants and bars.
This cheering jobs analysis was based on data from Social Security with restaurants accountable for the creation of 28,000 new jobs between January and September - which, for the Secretary of State for Tourism, is a sign that the drop in VAT from 23% to 13% is having a positive impact on job creation and business confidence.
Despite the Algarve be the fastest growing region, with Faro registering a jobs growth of 58.35%, the Açores did well with a growth of 21.88%, followed by Leiria (18.09%) and Beja, up 23.48%.
The hike in VAT three and a half years ago to 23% was part of a raft of measures to cut the deficit and was imposed by the Passos Coelho government despite vociferous protests by food and drink busiensses.
Many restaurant and bar jobs will turn out to be seasonal and the year-end figures will give a better indication of those jobs that are permanent compared to those that only last through the summertime tourist boom.
