Drinks industry calls for VAT rate to be temporarily cut

The drinks industry is calling for the VAT rate to be cut to help the country's struggling 7,000 p
Drinks industry calls for VAT rate to be temporarily cut
A DCU report showed consumer demand will be lower after lockdown due to higher unemployment and reduced earnings.
A DCU report showed consumer demand will be lower after lockdown due to higher unemployment and reduced earnings.

The drinks industry is calling for the VAT rate to be cut to help the country's struggling 7,000 pubs.

The Licenced Vintners Association and Vintners Federation of Ireland want it reduced as a new DCU report shows 22,500 jobs in the sector are at risk.

It also finds consumer demand will be lower after lockdown due to higher unemployment and reduced earnings.

Report author DCU Economist Tony Foley says they want VAT slashed for drink and food to an equal rate of 9%.

"It is 23% served in a pub and in terms of food it's 13.5% but there is an EU provision which allows pubs to have a levy of VAT which would be at the same rate as food," said Mr Foley.

"Now the expectation is that 13.5% would be dropped to 9% in the government stimulation plan so the proposal is that the serving of alcohol in pubs and bars should be down to 9%."

The report found that it would cost €143m in terms of Exchequer resources if it was to be done on a temporary basis from August to December.

"It's basically proposed on a temporary basis to deal with what you could call the dire business circumstances and constraints on the licenced trade primarily because of Covid and also because of the recession."

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