Bills in French restaurants and cafes are set to drop from Wednesday 1st July 09 after the government slashes value-added tax for the restaurant business from 19.6% to 5.5%.
Big restaurant chains and many smaller restaurants have said they will lower their prices, with the cost of a traditional espresso coffee in many establishments set to go down from EUR 1.2 to EUR 1. Lowering prices is not obligatory however under the new measure.
France has campaigned for seven years to get the go-ahead from European Union partners to lower value-added tax for restaurants and cafes. The measure will cost the French state EUR 2.38 billion (USD 3.34 billion) a year but owners have undertaken to employ 40,000 more people.
