Authors : Youssef Benzarti and Dorian Carloni
In July 2009, the Value-Added Tax (VAT) rate on sit-down restaurants was cut from 19.6% to 5.5%. At the time, a substantial number of restaurant owners signed the so-called Contrat d’avenir committing to sharing the windfalls from the VAT reduction equally among consumers, workers and themselves. This note shows that the effects of the reform were significantly different from what was suggested by the Contrat d’avenir. Indeed, the VAT reduction mostly benefited restaurant owners. More precisely, we find that prices only decreased by 1.9% thirty months after the VAT cut, the cost of employees and material goods increased by 4.1 and 5 % respectively, and that the profits of sit-down restaurants owners increased by around 24 %. Using these estimates we conclude that: the effect on consumers was limited, employees and sellers of material goods shared 18.6 and 12.1% of the total benefit, and the reform mostly benefited owners of sit-down restaurants, who pocketed around 56% of the tax cut. We also analyze the effect of the January 2012 VAT increase from 5.5% to 7% and the January 2014 VAT increase from 7% to 10% and find that prices increased 4 to 5 times more than they decreased following the VAT cut. This suggests that temporary VAT cuts mostly benefit firms rather than consumers and can result in higher equilibrium prices once repealed.
- Although the July 2009 sit-down restaurant VAT cut was supposed to be equally shared among restaurant owners, consumers and workers, it mostly benefited restaurant owners as prices decreased very little following the VAT cut.
- Sit-down restaurant prices responded 4 to 5 times more to the subsequent January 2012 and January 2014 VAT increases compared to their response to the July 2009 VAT decrease.
- As a consequence, temporary VAT cuts are not efficient at stimulating demand because they mostly benefit firms and can result in higher equilibrium prices.
- Le Figaro Economie, 28/05/2018 – La baisse de la TVA sur la restauration a très peu bénéficié aux clients
- Capital, 29/05/2018 – La TVA réduite a surtout profité aux restaurateurs, pas aux clients
- France 2, 29/05/2018 – Journal de 13h “TVA restauration : les patrons seuls bénéficiaires de la baisse”
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BFM Business, 30/05/2018 – Les restaurateurs ont profité de la baisse de la TVA pour… s’en mettre plein les poches
- Ouest-France, 30/05/18 – La TVA réduite a surtout profité aux restaurateurs
- Economie Matin, 31/05/2018 – Restauration : la baisse de la TVA a davantage profité aux restaurateurs
- Lexi Actu, 06/06/2018 – Note de l’Institut des politiques publiques sur les bénéficiaires de la baisse de la TVA dans la restauration en 2009
- AFP (Boursorama), 07/06/2018 – Bruno Le Maire n’exclut pas un réexamen des taux de TVA réduits
- AFP (Orange), 07/06/18 – La baisse de la TVA a surtout profité aux restaurateurs, très peu aux clients
- Les Echos, 07/06/2018 – Restauration, logement, transport : les taux réduits de TVA dans le viseur de Le Maire
- L’Express, 11/06/2018 – A qui profitent les TVA réduites visées par Bercy?
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