Finance minister tells 'profitable' businesses to pass Vat cut on to customers

Finance minister tells 'profitable' businesses to pass Vat cut on to customers
Finance minister Paschal Donohoe wants to see "profitable" businesses pass on the savings from the Vat cut to customers.

Finance minister Paschal Donohoe has called on "profitable" retailers to pass the Vat cut on to consumers.

He said the government's July stimulus package was worth €1,000 for every Irish citizen and is a "timely" plan to help rescue the sectors worst hit by the pandemic. It included a surprise cut to the Vat rate from 23% to 21%, designed to motivate spending.

Outlining elements of the €5bn spending plan, he said the deal would also help farmers, house buyers, consumers, as well as businesses. The total package spend amounts to 3% of national income for a year, he said.

Mr Donohoe said the government would “support a lifeline” for the country until “better days come”.

He said the value of the measures was equivalent to €1,000 for every Irish citizen, but he also faced questions about the 2% VAT rate cut as part of the plan.

While ministers have said it is up to retailers to decide whether to pass this on, Mr Donohoe said he wants to see "profitable" businesses giving consumers a discount. There was "an expectation" on larger retailers to pass on the discount, he said.

"We want all retailers to pass on the Vat cut but we do recognise that for some retailers their situation is so precarious that they might pass some of it on to customers and keep some to retain their people employed," he said. 

Supermarket group Aldi were the first big retail chain on Friday to pledge they they would pass on the Vat discounts to customers.


Earlier, Tánaiste Leo Varadkar said shops and businesses could decide on whether or not they pass on the new Vat cut to customers.

Mr Varadkar said the actual savings for businesses would help save jobs. He also defended the 'stay and spend' tax rebate plan which will see customers able to reclaim up to €125 for spending €625 in hotels or restaurants between October and April.

He told Newstalk that a holiday voucher scheme would not have worked. 

Sinn Féin has criticised the July stimulus package, calling it miserly. They said people who do not pay tax will not benefit from the tax rebate but Mr Varadkar said up to 2.4 million people should see the benefit.

"It will be simple: you just take a picture of the receipt on your phone, and you can sent it via an app to the Revenue Commissioners and you'll get the rebate in the next tax year," the Tánaiste said.

Public expenditure minister Michael McGrath said the “scale of the pandemic shock was unprecedented” and the expected spend by the government this year had risen from €70bn to some €86bn.

Among the measures announced was the extension of the wage subsidy scheme, which will now remain in place until March 2021, and is designed to prevent businesses from stopping trading, Mr McGrath said.

Arts and Culture Minister Catherine Martin outlined grants, aid and supports for the arts, musicians, TV production for those sectors, sports as well as training and help for the tourism sector.

She said great damage had been done to these areas during the pandemic.

Some €23m will be given to the arts and culture sectors, including €10m for artists and performers and a dedicated fund for musicians.

In travel, initiatives will include €26m for bus adaptation grants, while coach tourism operators can draw down monies from a €10m pot.

The stimulus pack age also includes the €270m that is expected to be spent on the stay and spend fund, where consumers get a tax rebate for spending in the hospitality sector.

More in this section

Puzzles logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

Let Me Tell You

Let Me Tell You is a new bespoke podcast series from 

Logo IE

Hosts Daniel McConnell and Paul Hosford take a look back at some of the most dramatic moments in recent Irish political history from the unique perspective of one of the key players involved.

Bespoke political podcast series from

Logo IE
Execution Time: 0.216 s