NCPA - National Center for Policy Analysis

France's Value Added Tax Invites Gastronomic Disaster

January 24, 2000

Some might say that France has the world's finest restaurants -- which put the haute in cuisine. But their socialist leaders -- having failed Economics 101 -- have set a course which many say will wreck that country's great restaurants and replace them with American-style fast-food joints.

  • The culprit is France's Value Added Tax -- which assesses a staggering 20.6 rate on all bills paid at traditional and gourmet restaurants, but only 5.5 percent on bills presented at fast-food restaurants.
  • Critics say it is small wonder that some 10,000 restaurants and country inns in France close each year.
  • France's restaurant industry employs some 800,000 people and -- in addition to serving a diminishing French clientele -- hosts nearly 70 million foreign tourists a year who spend on food the equivalent of $30 billion.
  • As one of the country's prize assets, haute cuisine restaurants, go out of business, they're replaced by pizzerias, hamburger joints, and Chinese and Indian takeouts.

"It is no laughing matter," says Andre Daguin, one of the world's great chefs. "It is not only a monstrosity on a world scale, but scandalous injustice," he adds.

Source: Andrew Borowiec," "Fine Restaurants Face a Taxing End," Washington Times, January 22, 2000.


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