Representatives of Lithuanian restaurants, hotels and cafés are planning to protest against rising taxes in Vilnius next Thursday. Such protests are planned in all three Baltic States at the same time.

Evalda Šiškauskienė, President of the Association of Hotels and Restaurants, who is organising the protest in Lithuania, says the sector will gather in front of the Government in Vilnius. In addition, all restaurants and cafes will be playing a recording at the time to report on the current situation.

„There will be at the Government (V. Kudirkos – BNS) Square, as always. Latvians will do it in front of the Seimas (Riga – BNS), Estonians will do it in all restaurants, because they are not only concerned about restaurants, they are concerned about the whole VAT (value added tax – BNS), which is being raised by the government. (...) We will all do this protest at the same time, “, – BNS said on Friday E. Šiškauskienė.

According to her, all restaurants in Estonia will stop service for 20 minutes.

E. Šiškauskienė said the Lithuanians decided not to follow suit because it would have too much impact on the already struggling restaurants. In addition, she said, not all restaurants belong to associations, and some have signed contracts with offices and commit to certain hours.

„As it is, consumption is already crashing and if you scare people into shutting down (at the time of the protests), people could go bankrupt immediately. The situation is so bad that you have no idea," she said.

„I was reading about bakeries yesterday, and the data from the VMI (State Tax Inspectorate – BNS) shows that 563 bankruptcy cases have been filed. And from all sides (bad – BNS). We started to look more broadly – coffee shops, bakeries, small restaurants, I'm not talking about the regions, there's just no profit left at all, now everybody is working at zero and they don't understand anymore why they have to work for what, –, – said E. Šiškauskienė. 

According to the data of the Government Data Agency, the turnover of restaurants, cafes and other catering companies in Lithuania in the first 8 months of the year amounted to EUR 1.056 billion (excluding VAT), which is a 7.3% decrease compared to the same period of the previous year.

Since January this year, the standard VAT rate of 21% has been applied to catering establishments again. From July 2021, a 9% tax has been in place to help businesses affected by the pandemic.  

Last autumn, the Seimas rejected a proposal by opposition groups to extend the 9% VAT rate until the end of December 2026. Parliament had earlier proposed to make the tax reduction permanent.

The Estonian Hotel and Restaurant Association (EHRL) announced on Wednesday that catering and accommodation establishments operating in the country will briefly shut down on the last day of the month to protest against the sector's crippling tax policy.

According to the EHRL announcement, cafes, restaurants, hotels and other public accommodation establishments will close their doors on 31 October from 12 noon. 30 minutes will be suspended for 10 minutes.

The strike in Estonia's catering and hospitality sector is being called for the first time in history.

In September, the Estonian government decided to introduce a so-called defence tax with three components – if the plan is approved by parliament, the value-added tax (VAT) will rise by 2 percentage points to 24% from 2025, and the personal income tax (personal income tax) rate will rise by a further 2 percentage points to 24% in 2026 (22% next year).

In addition, corporate income tax would be increased by a further 2 percentage points to 24% from 2026 (rising to 22% next year). In 2026, there would also be a 2% rate on reinvested profits, which are currently tax-free in Estonia. 

There are no progressive taxes in Estonia, so all taxpayers will pay the same rates.