Hospitality VAT rate
Marian Harkin urged the Government to delay the VAT increase on food in hospitality, saying small cafés and restaurants could close. The Minister said the Government was committed to supporting small businesses and pointed to budget supports.
I raise once again the issue of the reinstatement of the 9% VAT rate on the food part of the hospitality sector. I know a decision has been taken in the budget but the finance Bill can still be amended. I am asking the Government to consider this. My own experience in Sligo-Leitrim shows very clearly that small, indigenous Irish-owned cafés and restaurants, many with a local or unique food offering, are the ones most likely to close because of the increased cost of doing business. I am asking if the Government will pause raising the VAT rate for just a year so that the Departments of enterprise and tourism could properly assess the increase in the VAT so that any decision taken would be based on the best possible evidence and deliver the best possible outcome.
Comment on this
I think we all agree and know that so often our small businesses, our coffee shops or cafés, are what makes Ireland a wonderful place to visit but also for people to live. You do not get in many other countries that kind of service or the kinds of cafés and shops we have. This Government is absolutely committed to supporting them and making sure not only that those businesses are sustained but also that they can grow. That is why significant investment is going into those businesses in the budget. Just today, the Cabinet signed off on €170 million to ensure the €4,000 direct payment goes to those businesses. This acknowledges the pressure they are under and the increase in the cost base overall. A body of work is being done to see how we can not only pause some of the areas we were going to progress, acknowledging the impact on those businesses, but also to see if we can do more to support those who work for them. We are acutely conscious of the challenges. I am very aware of many in my constituency as well. I believe the Government is doing everything it can to support them.