The Estonian Hotel and Restaurant Association (EHRL) has proposed that the government grant a tax moratorium to the tourism industry and apply a zero VAT rate to accommodation and catering services through the end of 2021.
EHRL board chairman Peter Roose said business has come to a halt for the accommodation and catering sector, and that tourism was hit first by the crisis and will take the longest to recover. 95 percent of accommodation establishments and restaurants across Estonia have closed their doors, and 98 percent of employees are currently at home.
The association proposed lifting the fringe benefit tax applicable to catering services and enabling businesses to adjourn the payment of labor taxes interest-free until the end of next year. It also said that reducing personal income tax by half should be considered as well.
In addition, in order to prevent a massive wave of layoffs, the EHRL wants the government to immediately introduce a new measure alongside the existing remuneration reimbursement measure for compensating employees for foregone wages.
According to the association, this would provide business operators that have lost more than a quarter of their revenue with a feeling of confidence for at least a year. Both the existing and the new measure must apply to all employees for whom businesses have paid unemployment insurance contributions, regardless of the form of employmnt relationship, it added.
"In current discussions among participants in the sector, it has been mentioned that in the current situation, of the sector's 30,000 workers, some 50-70 would have to be laid off by the end of the year at the latest," the EHRL said in a letter to the government on Thursday.
Editor: Aili Vahtla