Hospitality sector seeks VAT cut

Galway delegates were part of the nationwide hospitality lobby lobbying last week to urge the Government to reinstate the nine per cent VAT rate on food services

Appealing on behalf of hospitality businesses ‘the length and breadth of the country’, they said it was essential that last September’s VAT increase be revisited in the upcoming Budget given the severe impact it is having on hospitality businesses – many of which are facing enormous financial pressures.

The demand came in a joint statement from the chief executives of the Irish Tourism Industry Confederation, Restaurants Association of Ireland, Vintners Federation of Ireland, Irish Hotels Federation and Licensed Vintners Association (LVA) before a ‘Supporting Irish Hospitality’ industry briefing in Buswells Hotel, Dublin.

The hospitality industry leaders said that their members’ businesses were now at a crossroads, ‘struggling to deal with very tight margins and reduced profitability due to ever-increasing operating costs’.

“To a large extent, this is being driven by the Government’s own economic policies including a series of employment-related cost increases coming into effect in close succession,” said the statement.

“The impact of these measures has been particularly acute for hospitality businesses given the labour-intensive nature of our industry.

“Businesses throughout the sector are forecasting worrying cost increases over the next twelve months at levels significantly outpacing inflation within the broader economy. This is on the back of a period of unprecedented cost increases in recent years,” they added.

They also pointed out that these businesses were also struggling to deal with the impact of significant pressures on consumer finances – all of which continue to reduce profitability and erode competitiveness.

“This poses an enormous concern given the implications for the long-term recovery of tourism and hospitality, our largest indigenous employer supporting some 270,000 livelihoods,” said the statement.

“While we have been repeatedly assured by the Government that it understands the extent of the challenges facing hospitality businesses, regrettably this has yet to translate into meaningful supports.

“It is now vital that the Government does everything possible to help put our sector and wider tourism industry on a more stable footing. At a minimum, this must include the reinstatement of the nine per cent VAT rate for food-related hospitality services,” they concluded.

Pictured: Minister of State for Disabilities and Galway East TD Anne Rabbitte with VFI member Cathal Sheridan from Milltown, and Portumna-native Adrian Cummins, CEO of the Restaurants Association of Ireland at the ‘Supporting Irish Hospitality’ event at Buswells Hotel is a hospitality coalition advocating to lower the VAT rate on food services from 13.5% to 9%.

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