The Association of Licensed Multiple Retailers (ALMR) and HOTREC, the umbrella association of hotels, restaurants and cafes in Europe, have released a report that highlights the benefits of low VAT.
The report states that lower VAT rates on hospitality services is a key contributor to Europe's competitiveness as a tourism destination.
Between 1990 and 2015, the report claims that the share of international tourism arrivals to Europe dropped from 60% to 51%. This puts Europe second, behind Asia and the Pacific region, in terms of international tourism receipts.
The report also states that low VAT would help create jobs in the industry. In the last decade, the sector created 2.5m new jobs, a 29% growth versus 7.1% in the overall economy.
Kate Nicholls, CEO of the ALMR said: "Our report provides powerful evidence in discussions around the effect of VAT on our industry, which already faces high taxes. Importantly, it demonstrates how low VAT will encourage growth in employment.
"As the only national trade body dedicated to representing the interests of licensed hospitality operators, we have long campaigned to reduce VAT for hospitality businesses in the UK. Hospitality is the third largest private sector employer the UK, with pubs and restaurants generating £60bn turnover, so we represent a vitally important industry."
The ALMR is calling on the industry to take part in Tax Equality Day on 20 September, which aims to highlight the benefit of a tax reduction by asking on-trade outlets cut the price of food and drink for the day.
Nicholls added: "The forthcoming election will provide us with an opportunity to push the case further, supported by evidence in this report, and we strongly encourage our members to get behind Tax Equality Day which is another powerful way to demonstrate the impact of lower VAT."
The ALMR says that it is confident that Brexit "will create the environment in which the Government can and will reduce VAT".
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