Fine Gael irked by Niall Collins's dismissal of blanket VAT cut for ‘price-gouging' hospitality sector
Fianna Fáil
TD
Niall Collins
and some
Fine Gael
representatives over his recent dismissal of a blanket cut to the VAT rate for the 'price-gouging' hospitality sector.
Mr Collins, Minister of State at the Department of Justice, said luxury and five-star hotels benefiting from a universal reduction in the VAT rate to 9 per cent would sit 'very, very uncomfortably with me'.
Fine Gael TD John Clendennen, who has previously worked in Irish and international hotel chains, questioned the Limerick politician's claim that the industry has engaged in 'immense' price gouging.
Some Fine Gael Ministers also criticised Mr Collins for trying to 'split hairs' and for criticising a policy that would help support entry-level jobs in rural Ireland.
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This week it emerged the full-year cost of the proposed VAT cut for the hospitality sector would be almost €1 billion, taking up the majority of the €1.5 billion tax package available for Budget 2026. It is understood the Government is now considering delaying the cut until the middle of next year and applying the cut to food and drink services but not accommodation.
Mr Collins told Limerick's Live 95 radio station this week he is 'not convinced that a VAT reduction is merited within the hospitality sector'. He said there was 'little to no evidence' that a previous temporary reduction from 13 per cent to 9 per cent for the sector 'was actually passed on to the consumer'.
'There's no evidence that that ever happened. And secondly, we saw an immense amount of price gouging within the sector in recent years,' Mr Collins said.
The Fianna Fáil TD said he would favour 'targeted interventions' for parts of the hospitality sector 'where there is a genuine threat of job losses'.
Mr Collins repeated his opposition to a blanket VAT rate on RTÉ Radio 1 on Thursday morning.
However, Mr Clendennen, a Fine Gael TD for Offaly, told The Irish Times he 'was not so sure' about Mr Collins's claim there was widespread evidence of price gouging in the hospitality sector.
Mr Clendennan said many hospitality businesses have come under 'pressure' with rising costs. He said he is 'very much in favour of VAT 9 as a measure to help business'.
'I think we need to try to ensure that the maximum number of hospitality businesses can remain viable,' he said.
Mr Collins's comments went down badly with Fine Gael Ministers, one of whom pointed out that he seemed to be at odds with Taoiseach Micheál Martin, who has indicated support for the measure this week.
Another Fine Gael Minister said he felt Mr Collins was complicating matters by singling out luxury hotels. The Minister said it was difficult to hear 'a rural TD trying to split hairs' over something that would create and sustain entry-level jobs in his own constituency. 'People have been crying out for this,' the Minister said.
Tánaiste Simon Harris had previously described the Government's commitment to cut VAT for the hospitality sector to 9 per cent as a 'solemn' vow. Mr Harris also told his parliamentary party last month that the measure would be included in Budget 2026.
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