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“One in three restaurants threatened”

New system will make casual work and tax evasion more difficult

According to Horeca Vlaanderen, the cash registers, designed to tackle the main methods of tax evasion by restaurant owners, will put one in three establishments out of business by making it impossible for them to employ casual staff, thus increasing costs.

“Look, casual labour is a reality,” said Jan de Haes of Horeca Vlaanderen on VRT radio. De Haes drew a distinction between “dark black”, meaning owners who purposefully cheat the tax system; mistakes that businesses make because the social regulations are so complicated; and “light black”, which involves people who only come to work occasionally when needed and prefer not to be registered and have to pay tax on their extra earnings.

The new system would involve a sort of “black box”, which would register every transaction and would only be accessible to the inspectors of the finance ministry. One of the favourite methods for restaurants to avoid tax is to take meals paid for in cash off the books. The new system would make that impossible. In addition, the registers can only be operated by wait staff who log into the system with their social security number or identity card, so that their employment is also registered.

“We’ve been asking for years for more flexible rules,” De Haes said, “but since the government drew up the system with the new registers, nothing more has been heard on that question.” Federal anti-fraud secretary Carl Devlies points out that the restaurant industry received a windfall as recently as 2009 when the government reduced VAT on meals from 21% to 12%. Most restaurants kept their prices the same for customers and banked the difference. The VAT cut was part of a larger effort to wipe out casual labour.

The case before the court will claim that the introduction of the new cash registers is discriminatory because it applies only to restaurants and not to cafes. Devlies rejects the argument that casual labour is a necessary evil but is willing to consider the question of discrimination. “It was only the restaurants who received the VAT reduction,” he said. “What is it they want, exactly? Do they want us to repeal that decision? Do they want the new registers introduced to the whole sector? Because I’m happy to discuss it.”

Meanwhile Horeca Brussel, the organisation’s Brussels counterpart, has said it would not support the court action. And chain restaurants like Lunch Garden and Pizza Hut, represented by the Comeos federation, have distanced themselves from the Flemish case. “There’s no excuse for using casual labour,” a spokesman for Comeos said.

(June 7, 2011)