Cafe and restaurant owners on Tuesday  called on the government to reduce VAT on beverages from 25 to 13 percent or to treat their labor costs as a tax deduction, which they say would "help the hospitality sector to recover, develop and increase wages," state agency Hina reported.

“They insist that this is important due to low wages and labour shortage in the country and abroad,” Hina said.

Caterers along with their partners from trade unions and trade associations “informed a press conference” on Tuesday about the difficulties in doing business in that sector during the pandemic, along with taxation and other burdens which they described as “devastating, difficult, and untenable,” Hina said.

The leader of the national association of cafe and restaurant owners, Jelena Tabak, said that either of these proposals would make more money available for investments and higher wages while money from contributions – paid by employers on top of salaries for pension funds and health care – would “flow in for the government.”

“If we reduced VAT, we would have about 10 percent more of our money left for investments, and if labor costs were recognized as a tax deduction that would contribute to the budget, and the health and pension systems. If neither of these proposals are accepted, VAT should be reduced at least on beverages in cafes, for non-alcoholic beverages, wine, beer, coffee, and tea, because cafes are having a hard time to survive, particularly in continental areas where they have been in lockdown for several months,” said Tabak.

She said that the proposal has also been sent to Finance Minister, Zdravko Maric, who has not yet replied to their proposal.

Tabak also appealed to the national Covid task force to allow cafes to work indoors too (restaurants have been allowed to do so for some time now) because “it is not clear why cafes are allowed to operate outdoors but not indoors” and particularly since Europe is opening up and “it is possible to operate quite safely indoors while adhering to restrictions,” Hina reported.