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Dáil
‹ An tOrd Gnó - Order of Business

Hospitality VAT reduction

Summary

Michael Collins seeks an immediate reduction of hospitality VAT from 13.5% to 9% after widespread business closures; the Taoiseach promises consultation and consideration in the next budget, without changing the current budget.

The increased VAT rate on the hospitality sector has left a total of 612 hospitality businesses closed in the past 12 months throughout the country. I acknowledge that in the programme for Government a reduction in the VAT rate is planned for the hospitality sector but for hundreds of cafés, restaurants and hairdressers this will be too little, too late. After much pleading, the Government has accepted that there is a crisis. Will the Government drop the VAT rate from 13.5% to 9% in the upcoming budget? Will this Government, with the full agreement of the House, immediately drop that VAT rate from 13.5% to 9%?

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Do you want it done immediately?

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Can it be done immediately?

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The Government has made commitments in the programme for Government in respect of VAT and costs that small- to medium-sized businesses are incurring. We want to consult business because it not just hospitality; the retail sector is feeling the pressures as well. We want to consult and come up with a package that will involve VAT in the context of the next budget. Public expenditure increased last year by 9.5%. That is an enormous increase in any one year. We had the budget. We announced the budget for 2025. It is not our intention to deviate from it. It involves very considerable current and capital expenditure increases. We will have a budget in September. Our plans will be very clear in early summer.

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