France's eateries serve up tax reduction

Willi's Wine Bar poster.

TEXT OF INTERVIEW

Tess Vigeland: If you're lucky enough to dine in France, as of today it's supposed to be a little cheaper. The value-added tax -- or VAT -- on restaurant meals dropped from almost 20 percent to 5.5 percent. Vive le France! Restaurants had argued for years that they were required to charge more in taxes than their faster-food brethren.

The catch is that the restaurants can kind of choose how much -- if any -- of that new tax discount to pass along to customers. We decided to check in with a restaurant owner in Paris to find out what this means from plate level. Mark Williamson is a British transplant to the City of Lights. Mark, tell us a little about your place and where you are.

Mark Williamson: I have Willi's Wine Bar here in Paris, which I started in 1980, and I also have a restaurant next door to Willi's, which is rather bigger. And they're both in the center of Paris, not very far from the Louvre, or the Places des Victoires, or the Comedie Francaise or the opera. So, I mean, where I am is the center of the world.

Vigeland: Of course it is. Of course it is. All right, well now that I am thoroughly ready for flying over to Paris for dinner, let's talk a little bit about this change in the VAT tax. Why were restaurants being taxed so highly in the first place?

WILLIAMSON: Um, it's something I think that sort of crept in. If you go back to the 70s when there wasn't any fast food, you'll find that restaurants had a level of tax that was, whatever it was, it was probably 17.6 percent, and they had a lower rate of tax on traiteur, which are places where you go and take food out. And slowly but surely, I mean, with the second arrival of McDonald's and various other things, the amount of business that was being done, shall we say out of the home but not in restaurants, grew and grew and grew. And restaurants were at a complete disadvantage.

Vigeland: So it really is . . . it was kinda restaurants versus the l'Big Mac.

WILLIAMSON: Restaurants versus the Big Mac and versus any kind of form of takeout meal.

Vigeland: So is this really, then, a matter of fairness?

WILLIAMSON: It's definitely a matter of fairness.

Vigeland: So are you expecting that this will help you out with getting more business, revenues up?

WILLIAMSON: It will certainly add to the short-term competitivity of restaurants. For the next six, eight months there'll be adjustments with people looking to see what their neighbors have done etc., etc. We've personally, I mean, we've just gone ahead and passed on our tax breaks to our client base immediately.

Vigeland: All right, so if I was lucky enough to win the lottery today and buy myself a trip on a private jet over to Paris, what would you recommend off of your menu, and what would the price be today?

WILLIAMSON: Ah, are you talking about the wine bar or the restaurant?

Vigeland: Oh, let's go with the restaurant. I'm in Paris, after all.

WILLIAMSON: Right, what we did in the restaurant, is we have a special seasonal menu, which at the moment is strawberries and tomatoes, which means the whole menu is kinda invaded with these products from start to finish. Now that menu was 48 euros until this morning. It is now 42-euros-30.

Vigeland: OK, well I'm going to go out and buy my lottery ticket right now. And hopefully I'll see you tonight.

WILLIAMSON: You probably won't get there for this evening, but this is an ongoing thing. You'll be able to get here by the weekend, and of course, we'd be very happy to see you.

Vigeland: Sounds divine. Mark Williamson is the owner of Willi's Wine Bar in the heart of Paris, and we've been talking about the drop in the VAT tax there. Thank you so much for your time. Au revoir and bon appetit.

WILLIAMSON: It was a pleasure talking to you.

About the author

Tess Vigeland is the host of Marketplace Money, where she takes a deep dive into why we do what we do with our money.

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