Government set to axe 9% Vat rate for hospitality sector
On Thursday, a cabinet sub-committee meeting is expected to consider the future of the various cost-of-living supports, including the reduced Vat rate with decisions being taken by the full Cabinet the following week.
The Government is set to dash the hopes of the hospitality industry by axing the 9% Vat rate for the sector, despite fresh calls for the lower rate to be extended.
Representatives of the hospitality industry met with the Minister for Finance Michael McGrath on Monday evening in order to restate their demand for the retention of the Vat rate.
While the meeting was described as a "listening exercise", the Department of Finance is said to be keen to end the tax break amid accusations of “price gouging” by the industry.
On the conclusion of the meeting, the Restaurants Association of Ireland (RAI) said there was "no indication" if the VAT rate would remain at 9% or return to 13.5%.
In a statement, the RAI said: "Ministers McGrath and Donohue met with representatives of the Hospitality sector. They listened to the concerns of industry representatives who advocated for the retention of the 9% vat rate for Hospitality. There was no indication if it would increase or remain at 9% The industry are hopeful the ministers will keep the rate at 9% to protect low-margin businesses like restaurants, pubs and cafes."
Over the weekend, the Restaurants Association of Ireland warned one in every five restaurants in Ireland will be at risk of closure if the Government increases the Vat rate back to 13.5%.
On Thursday, a cabinet sub-committee meeting is expected to consider the future of the various cost-of-living supports, including the reduced Vat rate with decisions being taken by the full Cabinet the following week.
The Coalition leaders met on Monday evening, ahead of Tuesday’s Cabinet meeting, but sources said the Vat issue is not expected to be formally discussed.
On the conclusion of the meeting, the RAI said there was "no indication" if the VAT rate would remain at 9% or return to 13.5%.
In a statement, the RAI said: "Ministers McGrath and Donohue met with representatives of the Hospitality sector. They listened to the concerns of industry representatives who advocated for the retention of the 9% vat rate for Hospitality. There was no indication if it would increase or remain at 9% The industry are hopeful the Ministers will keep the rate at 9% to protect low margin businesses like Restaurants, Pubs and Cafes."
The 9% Vat rate for hospitality was introduced during the Covid-19 pandemic. Last year, it was extended in light of the severe cost of living increases and high rates of inflation caused by the Russian invasion of Ukraine.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
