Nationalist Party Proposes Catering VAT Cut; Labour Warns of Economic Risks

20 May 2026, 01:01 · Updated 20 May 2026, 04:02

The Nationalist Party (PN) has put forward a proposal to reduce the Value Added Tax (VAT) rate for the catering sector. The party suggests lowering the VAT from the current 18% to 7%, arguing that this measure would provide much-needed support to businesses facing rising operating costs.

According to Lovin Malta, the Association of Catering Establishments (ACE) has expressed its backing for the PN's proposed VAT cut. This support underscores the catering industry's call for stronger government assistance amidst economic pressures.

In response, Prime Minister Robert Abela has voiced strong criticism of the Nationalist Party's electoral manifesto, particularly its financial proposals. Lovin Malta reported Dr Abela's warning that these proposals contain "basic but glaring mistakes" that could lead Malta to economic ruin. He specifically cautioned that such errors could push the country into an excessive deficit procedure.

The Prime Minister's comments come as political leaders engage in various debates and campaign events ahead of the upcoming election. Times of Malta reported on a debate between Robert Abela and PN candidate Alex Borg, organised by the SME Chamber, which took place on Tuesday morning, where economic strategies and proposals were likely key topics of discussion.

The Association of Catering Establishments (ACE) has explicitly backed the Nationalist Party's proposal to reduce the Value Added Tax (VAT) for the catering sector. This support comes as the PN advocates for a reduction from the current 18% to 7% for catering establishments.

Nationalist Party candidate Alex Borg further commented on the proposal, stating that the party holds a long-term vision for the catering sector. This vision aims to provide stability and growth for businesses within the industry.