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Dáil
‹ Ceisteanna ar Pholasaí nó ar Reachtaíocht - Questions on Policy or Legislation

Hospitality sector costs

Summary

Deputy Harkin warned that independent cafés, restaurants and pubs are closing under rising costs, higher VAT and warehoused tax pressures. The Minister pointed to Government support through the pandemic and a €257 million increased cost of business grant.

I ask that the Minister speak with the Minister for Enterprise, Trade and Employment regarding the current crisis in the hospitality sector, especially for the smaller, independent-led cafes, restaurants and pubs that serve food.

Every week, more and more of them are closing their doors permanently. They are being hit by a wave of extra costs including an increase in the VAT rate, wage inflation, increasing supplier costs and their warehoused taxes. There is also additional and increasing pressure in many towns, including in Bundoran and Rosses Point in my own constituency, due to hotel accommodation being used for refugees. The downstream tourism and retail businesses are suffering even more because there are no tourists. A suite of measures needs to be put in place and the Government needs to consider reinstating the 9% VAT rate, a much longer timeline to pay warehoused tax debt and a tailored support package for this sector.

Comment on this

This Government has supported businesses right the way through the Covid pandemic. Most businesses and sectors will respect what we have done there. We work together to protect businesses. I am aware of increased costs on businesses due to inflation in the cost of wages, materials and so on, as are we all. The Government is bringing forward and has signed off on a package of €257 million through the increased cost of business grant. That will be a vital measure to support those small and medium businesses. I know the Deputy has raised this issue directly with the Minister. That grant will be paid at a rate of half of an enterprise's commercial rates bill for 2023 for firms paying up to €10,000 in rates. It is a flat €5,000 grant. Our analysis suggests that approximately 143,000 businesses will benefit from that. The Deputy may have seen the Minister for Finance, Deputy McGrath's remarks on the warehousing arrangements for tax debt. He has committed to looking at those again. We want to support the indigenous SME sector and we have done so. The Minister for Finance has committed to looking at the issue to see what we can do to help on the tax side. We expect the increased cost of business grant to be paid out by the end of the second quarter of this year.

Comment on this