"We have decided to remove the deadline for the VAT relief for hotels because the deadline was set by the previous government. There's relatively no grounds for the temporariness of this relief as hotels are a business that cannot distinguish their customers according to whether they are foreign businesses or end consumers," the prime minister told press conference on Friday, presenting next year's state budget.
As a result, she said, not being entitled to a zero VAT rate gives hotels "a certain competitive non-logic".
Meanwhile, the reduced VAT rate for caterers will stay in place until the middle of next year to ease the transition period, the premier said.
"The government will propose to extend the relief for six months so that the catering sector does not face some additional major change in January when we will have higher electricity prices and other problems," Simonyte said.
"I would like to stress that this relief was introduced as a temporary measure, I initiated it as a temporary measure and I continue to hold this view," she added.
Earlier, the government said it had no plans to extend the VAT relief for restaurants, despite businesses fearing that failure to do so would force some businesses to close.