Bars and restaurants have positive results in the month of May %%page%%

Although it is still difficult to pass on the increase in the price of inputs to final prices, establishments in the away-from-home food sector are no longer subject to sharp fluctuations in inflation, which explains the positive results in the month of May. Federal taxes, however, are one of the main challenges for bars and restaurants. This is the analysis of João Ricardo Tonin, economist at FoodCo.

According to data from the Brazilian Association of Bars and Restaurants (Abrasel), 43% of establishments reported having made a profit during May 2023. In April, the percentage was 37%. For Tonin, this is a result of the increase in the number of commemorative dates and price stability.

Also according to Abrasel, 21% of establishments faced losses in May, the same percentage as in April. As for debts, the association found that 42% of entrepreneurs have overdue debts, 80% of which are related to federal taxes.

The economist explains that taxation affects the income of establishments in two ways: direct, paid based on billing and labor; or indirect, applied to consumption, which reduces the purchasing power of families.

In the tax reform being discussed in the National Congress, there is an expectation of creating a separate rate on the food sector outside the home, which, for the economist, is a warning sign.

“Although the reform still has a long way to go before its approval, it is necessary to be aware of the tax rate that will be implemented. If Brazil institutes a Value Added Tax (VAT) rate of around 25%, we will have one of the highest taxes on consumption in the world. If the consumer’s pocket is tight, we will continue to deal with consumption restriction, family indebtedness and less willingness of consumers to purchase products and services offered by the food sector away from home”, concludes Tonin.

The FoodCo. with the complete and audio analysis of the economist João Ricardo Tonin is an exclusive weekly content for the platform’s subscribers. FoodCo. is the largest community of bar and restaurant owners in Brazil. There are more than 13,000 entrepreneurs in the sector gathered in a network of knowledge and networking, with access to essential content for those who undertake food outside the home.