VAT rate cut for hospitality is back on the table - but will it be enough?
One of the shake-outs from last year's
general election
and the subsequent Government formation talks is that cutting the
VAT
rate for the hospitality sector to 9 per cent from 13.5 per cent now looks almost certain to happen.
Ahead of last year's budget the idea was knocked back, with Department of Finance officials particularly opposed to the idea, calling it unjustified.
'The cost is very significant. For instance the cost of a further temporary VAT reduction to 9% for a full year is estimated to be €764 million,' the department said at the time.
So what changed?
READ MORE
Aside from the election and a new Coalition, Ireland's budgetary position looks much more precarious as the impacts of Donald Trump's tariffs ripple across the globe, with Ireland and its bounteous corporation tax revenue particularly vulnerable.
As a result, as Cliff Taylor notes,
the Government has considerably less room to manoeuvre this year
in terms of tax cuts than last year, and the mooted cut in VAT for hospitality is likely to eat up most of the available resources. The move has the potential to become a big political issue.
Firstly, there is likely to be much less by way of an income tax package for households. As Taylor notes: 'If income tax bands and credits are not adjusted for inflation each year, then taxpayers end up seeing a bit more of their income taken in tax – for example due to a higher proportion of their income being payable at the higher 40 per cent rate.'
Just doing nothing, the tax burden creeps higher.
Secondly, other SMEs may wonder why they are being left out. And finally customers are unlikely to see much by way of a benefit, other than holding down the rate of inflation they face while eating and drinking out, at least for a while.
And what of the benefit for the hospitality sector? The sector remains under pressure with regular reports of businesses closing down, with high costs a frequently cited factor.
However, the sector faces a wide range of domestic price pressures, including sharply rising food prices and stubbornly high energy and insurance costs.
The more challenging issue for the sector and the Government is that
Ireland is now the second most expensive country in the European Union
with only Danes expected to pay more for a range of goods and services.
When it comes to alcohol and tobacco, prices here are the most expensive, while food and non-alcoholic drink prices in Ireland are third highest in the EU, though this is a slight improvement on recent years.
This is likely to be a factor in the decline in inbound tourism – a key pillar for the hospitality sector - this year, with
the Central Statistics Office reporting
a 4 per cent fall in tourism numbers in April and a 10 per cent decline in spending.
While a VAT rate cut may provide short-term relief for the hospitality sector, it is unlikely to deal with the structural challenges it faces.
Five Key Reads
Annie McCarrick's family in Long Island speak out:
'The gardaí did not investigate who we thought was guilty in the very beginning' - The mother, aunt and oldest friend of the American woman who went missing in Ireland in 1993 talk about how they would take comfort in having their long-standing belief validated.
Family Fallouts:
'I can't describe the heartache of not having a relationship with my sister' - When sibling relationships fall apart, it can have devastating consequences on our emotional wellbeing and our physical health. Roe McDermott explores how sibling bonds can become emotionally charged, distant, or even estranged - and the impact this can have.
Dolores McNamara: Whatever happened to the €115m lotto winner?
This week the country was gripped by the news that an
Irish winner
had scooped a €250 million EuroMillions jackpot. To mark the occasion, Conor Pope reflects on the fortunes of Limerick woman Dolores McNamara, who won the then largest ever
EuroMillions jackpot
of €115 million in 2005. The tale encompasses country estates, possibly misguided foreign investments, and security.
How AIB came back from the brink:
Sixteen years after its initial rescue amid the crash, AIB - once worth less than its art collection - returned this week to full private ownership as the Government
sold its final 2 per cent stake
to market investors. The Irish bank is now hugely profitable, but, as Joe Brennan writes, the legacy of the bailout still lingers.
How the death of an 'old boy from Ireland' in London-Irish suburb sparked a misguided viral appeal:
A handwritten notice in a shop window of the death and upcoming funeral of Sligo man Martin Fallon in London recently triggered a well-intentioned but misguided campaign to find Fallon's family. Mark Paul examined what the viral campaign got wrong, as well as Fallon's life story and what it says about the changing nature of a London-Irish enclave.
As always, there is much more on
irishtimes.com
, including rundowns of all the latest movies in our
film reviews
, tips for the best restaurants in our
food section
and all the latest in
sport
. There are plenty more articles exclusively available for Irish Times subscribers
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Irish Times
2 hours ago
- Irish Times
Letters to the Editor, June 26th: On Israel's relationship with Ireland, Donald Trump and food labels
Sir, – Recent debate within Ireland regarding the Middle East has been reductive and almost exclusively unipolar, led by Tánaiste Simon Harris, whose rhetoric has at times been ugly. Indeed the entire political establishment, along with mainstream social media, backed up by the @X brigade and the unions, have contributed to the toxic, hostile environment in Ireland towards Israel. It is impossible to know exactly to what extent this mirrors public opinion. While there are many critical voices in Europe, some justified for sure, about aspects of Israel's war against Hamas, Hizbullah and now their paymaster, Iran itself, in no other European country has this been as openly and aggressively venomous towards the Jewish state as in Ireland. This antagonism resulted in the withdrawal of the Israeli embassy from Ireland. READ MORE Ireland has taken this path while at the same time fetishising over Palestine and Iran, the latter being the West's largest terror threat. Most countries – some silently – are cheering Israel for having the guts to dismantle the nuclear threat. The war will eventually end. The deep freeze between Ireland and Israel might never do so. Does this matter? Israel has one of the most sophisticated global industrial, technological and scientific reach of any country. The compound fracture with Israel may damage not just the Irish economy but also, for example, the welfare of patients in hospital beds, deprived of the latest medical advances. Maybe Ireland will be judged as the champion of the oppressed, a success story hailed by the more radical pro-Palestinian and pro-Iranian movement; but if so, what are the long-term implications? Will its long-held reputation as a country of a céad mile fáilte for all visitors regardless of race, religion or nationality be forever tarnished? – Yours, etc, Dr ED ABRAHAMSON, Cornwall, England. Sir, – Watching desperate men, women and children in Gaza scrambling with their containers towards food relief trucks daily on our television screens is very distressing. Then you hear many of these desperate people have been shot at by the Israeli army. When asked why, the army's comment is always: 'We are looking into it.' As yet I still have to hear the results of their investigations. – Yours, etc, EILEEN BANNAN, Letterkenny, Co Donegal . Sir, – Referring to Israel's breaches of the obligation to respect human rights enshrined in Article 2 of its free trade agreement with the European Union, Kajia Kallas, the EU High Representative for Foreign Affairs, is apparently prepared to consider 'a proposal' to restrict trade between EU states and 'violent settlers' in occupied Palestine. However, she stresses that the idea is not to 'punish' Israel, but pressure it to 'change course' (' Spain's foreign minister renews call for EU to suspend Israel trade deal ,' June 24th). Two anomalies strike me here. Firstly, under the Fourth Geneva Convention, all settlers in occupied Palestine are illegal, and not just violent ones. When the trade agreement with Israel was signed in 1995, Israel had already built numerous illegal settlements in the Occupied Palestinian Territory and many of the settlers were violent – hence the agreement itself was arguably illegal from the start. Secondly, the International Holocaust Remembrance Alliance's (IHRA) definition of anti-Semitism, endorsed by the Irish Government, condemns 'applying double standards [to Israel] by requiring of it a behaviour not expected or demanded of any other democratic nation'. Would any other state violating the terms of a trade agreement with the EU be told nicely that the idea is not to 'punish' it, but pressure it to 'change course'? If not, is this not a serious example of double standards? – Yours, etc, RAYMOND DEANE, Broadstone, Dublin 7. Trump and the ceasefire Sir, – Your correspondent, Keith Duggan, is to be commended for at least trying to report on US president Donald Trump's leadership style in an objective manner. He has broken with the anti-Trump consensus in the Irish media without becoming a Trump supporter. Referring to the ceasefire between Israel and Iran, he says: 'But the radical switch of fortunes suggested that Trump's uncanny instinct for whom to back, and when, had served him well again. 'The ceasefire declaration was arguably the most statesmanlike delivery of Trump's political life – he didn't feel the need to mention himself even once.' (' Israel-Iran ceasefire announcement shows Trump's uncanny ability to shape the narrative ,' June 24th). I believe Trump was wrong to authorise the US intervention in Israel's war on Iran while his efforts to end the aggression are to be welcomed. But whatever about that, reporting that pulls us back from simplistic group-think deserves support, especially in the context of current politics in the US. – Yours, etc, DAVID ALVEY, Daingean, Co Offaly. Sir, – Does the US president's use of the expletive legitimise it? It looked like a Father Jack moment to me. – Yours, etc, CORMAC MEEHAN, Bundoran, Co Donegal. Sir, –When recently referring to the actions of Israel and Iran, Donald Trump said that 'they don't know what the f**k they are doing'. Coming from him that is quite a statement. –Yours etc BRIAN CULLEN , Rathfarnham, Dublin 16. A beef over food labelling Sir, – Regarding Conor Pope's article on the farmers' campaign to stop plant-based producers from using terms like 'sausage' and 'burger' (' Farmers accuse vegan food makers of hijacking sausages ,' June 25th), the logic, it seems, is to save the public from the shock of discovering a vegan sausage contains – heaven forbid –no pig. If we're to pursue such linguistic purity, surely the dead animal industry should embrace radical honesty too. After all, 'pork' and 'beef' are just euphemisms that soften the reality of what's on our plates. Let's police food language with gusto and transparency for all – so everyone knows exactly what they're eating, whether it once oinked, mooed, or sprouted in a field. Imagine a burger packet simply declaring: 'Contains connective tissue mechanically extracted from the dead body of a slaughtered cow. Producing this burger generated about 9.7 kg of CO2 emissions – over 20 times more than a plant-based patty – and contributed to deforestation and climate change. Regular consumption of red and processed meat is also linked to higher risks of heart disease and cancer. Now that's labelling you can't misunderstand. – Yours, etc, LOUISA MOSS, Annamoe Road, Dublin 7. Sir, – My understanding is that sausages and other such food products were traditionally made with whatever was to hand and often what might otherwise have been unusable – a great diversity. They might include non-meat products such as oatmeal. The shape of the product – sausage, burger or whatever – was what defined the product. It therefore seems the real cynicism is for meat producers to seek to ban vegan and veggie products which use such labels. A pork sausage has pork in it, a veggie sausage has vegetable and presumably grain products, both with flavourings. There is no need to be silly about sausages. – Yours, etc, ROB FAIRMICHAEL, Ballynafeigh, Belfast. An egregious solution Sir, – Thank you to Cathy Dillon for her well-crafted piece in An Irishwoman's Diary (June 23d), and for helping me find the solution to 13 across in Simplex, with her use of the word 'egregious'. – Yours, etc, JOE CARROLL, Bellurgan Point, Dundalk. Putting the cart before the horse Sir, –The Taoiseach has brought a 10- year plan, costing multi millions, to Cabinet to develop the GPO and O'Connell Street. No modern city can properly function without key frontline workers such as gardaí, teachers, nurses, firefighters etc. Dublin rents are now among the highest in the world and are not affordable for these workers. The result is long, stressful and expensive commutes. These vital people are voting with their feet and are choosing to work anywhere but Dublin, with large numbers emigrating or leaving their chosen profession. What a complete waste of talent and money. Surely it is a case of putting the cart before the horse? Start with a viable solution to the accommodation crisis for key workers to live near their place of work. A 24/7 Garda presence on O'Connell Street and neighbouring streets is surely the first step to bringing O'Connell Street back to its former glory. – Yours, etc, PASCHAL TAGGART, Rathgar, Dublin 6. Sir, – The comments from the Dublin City Council project manager are frustrating but, sadly, no longer surprising ('College Green plaza redevelopment budget soars to €80 million,'June 24th). A 700 per cent increase in the budget for the long-promised College Green pedestrianisation, and completion now unlikely before 2030? It is hard to see this as anything other than a failure of basic project management, leadership and accountability. To make matters worse, 40 per cent of the current budget is being classified as 'contingency' – which reads less like prudent planning and more like an admission that those in charge have little to no confidence in their own financial planning. Thirteen-plus years to pedestrianise a city street is not just an embarrassment – it reflects the broader inefficiency and dysfunction that increasingly characterise how we approach public projects in this country. Our city and our citizens deserve much better. – Yours, etc, PETER LYNN, Sandymount, Dublin 4. Sir, – Your editorial (' Creating a new city centre space ,' June 24th) on the escalating cost of the College Green Plaza redevelopment misses the real crisis: stalling projects like this has stifled cycling, robbing citizens of health benefits. Cycling slashes risk of death from heart disease and dementia by 30-40 per cent, yet delays keep our streets unsafe and lacking a joined-up network of protected bike lanes. Plans like this will change hostile environments into ones that are safe, enabling Dubliners to choose healthy mobility. As cycle infrastructure projects wallow in planning purgatory, every year lost costs lives, not just euro. – Yours, etc, Dr SHANE O'HANLON, Terenure, Dublin 6. Electric cars in the slow lane Sir, – Bernard Farrelly (Letters, June 25th) is so right to point out the lack of high-speed chargers available around the national road network. Not only do the drivers of electric vehicles have to wait to fill up while their fellow petrol and diesel road users are done and dusted in two or three minutes, but they must also grapple with very rigid and heavy charging cables which are sometimes too short, a different machine and app for every service station and the inability to just pay by tap and go. When encountering yet another new EV charging provider on your journey you have to register online, verify by email and figure out what code on the charger may or may not need to be scanned. All this in the furthest flung corner of the service station and fully open to the elements. If the Government wishes to ramp up the number of electric cars on the road at pace, they might want to make sure filling up with electricity is at least as easy as filling up with liquid fuel. – Yours, etc, JOE FAHY, Dangan, Galway. Alcohol and labelling Sir, – Regarding the labelling of alcohol products in Ireland, I suggest using a similar strategy to that employed by Norway with regards to its oil industry. Norway exports oil products all over the world, while at the same time protecting its citizens from local pollution from those oil products by subsidising one of the most widespread electric vehicle systems in the world. Ireland could do similar with alcohol labelling. Produce a special label specifically for the Irish market, while exporting without our specific labelling to the rest of the world. The cost of Irish-specific labelling can be paid for by the enormous volume of export product currently going all over the world. Would it cost 1/2 cent extra on an export bottle to pay for the Irish labelling? An Irish solution to an Irish problem. – Yours, etc, DAVID DORAN, Co Carlow. Supporting the Civil Service Sir, – Eddie Molloy, (Letters, June 21st) emerged from his redoubt to fire off a virtual scattergun criticism of the entire Civil Service administration. He says with admirable confidence that the service suffers 'administrative incompetence and inertia', segueing effortlessly into the 'fact' that the Civil Service is not up to the job. As a former civil servant, there was a recognition that there tended to be a cyclical attack on the public service, akin to the life cycle of cicadas, ie about every 15 years. Does Mr Molloy not recall any or all of the incredible private sector fails by banks, building societies and other financial institutions in the relatively recent past, that almost brought the country to its knees, beholden to the International Monetary Fund? On another front, the Department of Health and the Health Service Executive, during the Covid pandemic, steadied the nation's nerve and brought us through an unprecedented crisis. Later on, certain individuals and groups, who should have known better, began a campaign to denigrate those who had worked tirelessly until the serious threat had receded, suggesting that the essential restrictions had been largely unnecessary. I am all for valid criticism, but generalised 'certainties' are never sustainable. – Yours, etc, PATRICK JUDGE, Dún Laoghaire, Co Dublin. Short letters Sir, – Regarding the letter about The Irish Times publishing longer letters as opposed to shorter ones: Short letters rule, OK. – Yours, etc, JOHN ROGERS, Rathowen, Co Westmeath.
Irish Examiner
3 hours ago
- Irish Examiner
Irish Examiner view: Satire dead as Trump makes peace
The ceasefire between Israel and Iran appears to be holding at the time of writing, though the swiftness of unfolding events in the Middle East has often made a mockery of presumption in the past. The two nations' exchange of missiles was a worrying escalation in a region not short of hair-trigger tempers, so we should not belittle anyone who is seeking to calm the situation. The performance of US president Donald Trump in these circumstances, however, bears closer inspection. Many readers will be familiar by now with the clip of Mr Trump using bad language in describing Israel and Iran; it is a soundbite that will probably play well with his base, and he may plausibly justify his choice of words while portraying himself as a peacemaker. That was surely part of the motivation for his outspokenness, particularly as it came before his trip to the annual meeting of Nato this week in Holland. Depicting himself as a peace broker would surely have bolstered Mr Trump's authority with his Nato allies, particularly as he is keen to get those allies contributing more to Nato's running costs. That authority was undermined by American intelligence reports suggesting the recent US missile attack on Iran did not obliterate that country's nuclear capability, as claimed, but merely set it back by a few months (reports Mr Trump immediately contradicted). It may not be coincidental that this week, Nato countries have accepted the need to contribute more revenue — but some at least have avoided being bound to Mr Trump's spending targets. This last development may have real-world implications in the future, but for now we are still processing extraordinary scenes: The US president cursing about other countries on air, and rubbishing his own intelligence services' findings, would have fuelled a month's worth of headlines at any other time. This week those stories were outdone by a US politician nominating Mr Trump for the Nobel Peace Prize because of the Iran-Israel ceasefire. When Henry Kissinger was nominated for that award, comedian Tom Lehrer declared satire dead. This week we learned that it is not dead but decomposing. Concrete supply: Infrastructure woes continue It is widely accepted that one of the great challenges of modern Irish life is the pressure on our national infrastructure. Energy is an obvious concern, not just because of our fragile energy security due to our location, but also due to the vast amounts of electricity consumed by data centres. Water supply is another ongoing headache, not least because of the various travails of Uisce Éireann ever since that body was founded. Now, we have learned that another key element in creating and maintaining large-scale infrastructure is in trouble. Engineering consultancy firm RPS carried out a study for the Irish Concrete Federation, which found replenishment rates of quarries are inadequate — currently they are running at 61% of the annual consumption. The study also found that planning permission was refused for over half of the volume of proposed extraction of sand, stone, and gravel in greater Dublin between 2017 and last year — while there have also been delays in obtaining planning permission to extend quarries or get permission for new sites. One does not need to be a civil engineer to realise that if supplies of sand, stone, and gravel dwindle, then there are obvious implications for our building capacity. It is notable that the lack of planning permissions is a key issue here, thus echoing the comments of the ESRI's Seán O'Driscoll in these pages recently. He pointed out then that the Government needed to accept that there was a 'national crisis in Irish infrastructure' if progress was to be achieved, and this study adds weight to that claim. Unfortunately, the response from the current administration does not seem to acknowledge that crisis. The Government will engage with the concrete industry about their concerns, according to housing minister James Browne, but he added that the independent planning system also has to take its 'natural course'. The various shambles we have witnessed in our planning system over the years do not depict that 'natural course' in a flattering light. The 'business as usual' approach on show here is the last response needed for a national crisis. Glastonbury festival: Kneecap drama The Glastonbury festival opened yesterday, with thousands of fans pouring into the venue to see their favourite musicians. This year there is an edge of controversy in the presence of Belfast band Kneecap; band member Liam Óg Ó hAnnaidh faces a terrorism charge for allegedly displaying a Hezbollah flag at a London show last year. British prime minister Keir Starmer said this week that it is not 'appropriate' for the band to perform at Glastonbury, while Tory leader Kemi Badenoch has said the BBC — which normally broadcasts many of the acts at the festival — should not show Kneecap's performance. Belfast band Kneecap. It was not clear at press time whether the BBC would show the Belfast band or wait until nearer the time to make a decision — Kneecap are due to play on Saturday. It is not for us to wonder that an experienced lawyer such as Mr Starmer should be expressing opinions which might be prejudicial to Mr Ó hAnnaidh's case. But we are hardly the only people who feel that British politicians surely have better things to do than complain about Kneecap. Read More Irish Examiner view: Cork crime series reveals a city divided by neglect of the northside
Irish Times
3 hours ago
- Irish Times
More than 100 complaints of excessive legal costs upheld by regulator
More than 100 complaints of excessive legal costs, most relating to family law and litigation costs, were upheld by the legal services regulator last year. A 14 per cent rise in complaints about legal practitioners to the regulator last year was largely due to a high volume of complaints by banks alleging failures by solicitors to comply with undertakings, the report of the Legal Services Regulatory Authority (LSRA) for 2024 also disclosed. Published on Thursday, the report said 143 of the more than 1,400 complaints finalised against legal practitioners last year were upheld, while more than 40 per cent were inadmissible. Of the complaints upheld by the regulator's complaints committee, 107 related to legal services and excessive costs, of which more than 60 per cent related to costs of litigation and family law. The remaining 36 of those upheld related to alleged misconduct. READ MORE Fifty-seven complaints of alleged misconduct were referred by the committee to the separate Legal Practitioners Disciplinary Tribunal because the authority cannot itself make findings of misconduct against legal practitioners. The LSRA has since 2020 received and investigated three types of complaints about solicitors and barristers – relating to alleged misconduct, inadequate legal services and excessive costs (overcharging). Some are mixed complaints and the vast number are against solicitors, reflecting the higher number of solicitors and their greater level of contact with clients. [ Judge criticises 'millionaire' legal costs and says losing litigants should be told lawyers' hourly rates Opens in new window ] It received 1,476 complaints last year, up 14 per cent on the 2023 figure, of which 1,410 related to solicitors and 66 to barristers. More than half, 762 (52 per cent), alleged misconduct only, 350 (24 per cent) alleged inadequate standards of legal services, mostly relating to litigation and conveyancing, and 23 (1 per cent) were from clients relating to excessive costs (overcharging). The remaining 341 complaints (23 per cent) were complaints on mixed grounds, of which 262 included an allegation of misconduct, 328 of inadequate services and 147 of excessive costs. Most complaints, 600 (41 per cent) concerned legal professionals practising in Co Dublin, 146 (10 per cent) related to Cork-based legal practitioners, 66 to Limerick and 53 to Kerry. Multiple complaints may be brought against an individual practitioner. Of the 1,474 complaints closed last year, 621 (41 per cent) were closed on inadmissibility grounds. A total of 143 complaints (10 per cent) were upheld and 182 (12 per cent) were not upheld. A further 324 complaints were resolved between the parties, including 62 with assistance of the LSRA's mediators. The LSRA made 18 successful applications to the High Court for orders to enforce its directions in complaints against legal practitioners. [ Inside the childcare courts: 'Making money from the misery of children - that's distasteful' Opens in new window ] The authority's chief executive Dr Brian Doherty said it was 'encouraging' more than one in five of all closed complaints were resolved between the parties, including with assistance of the regulator's complaints staff and trained mediators. While informal resolution may not be appropriate in every type of complaint, the evidence is that informal resolution 'can be a very effective and efficient way for both parties to work through their issues or disputes', he said. The report noted continued growth in 2024 in partnerships of solicitors seeking to operate as Limited Liability Partnerships (LLPs). A total of 26 LLPs were authorised by the LSRA during the year, bringing to 509 the number authorised since November 2019 when LLPs were introduced. The number of barristers continues to increase. A total of 3,071 barristers were on the Roll of Practising Barristers by the end of 2024, up 20 on the previous year. Of these, 2,134 were members of the Law Library and 937 were practising outside of the Law Library.
