Customers need lower prices if hospitality sector VAT rate is axed, TD says
A cut in the VAT rate for the hospitality sector must be passed on to customers, a Government TD has insisted.
Paula Butterly, the Fine Gael Deputy in Louth said consumers must also benefit with reduced prices in our bars, restaurants and hotels.
The Finance Minister Paschal Donohue is expected to axe the vat rate in the October budget from 13.5 to 9pc at a cost of almost €1 billion to the exchequer.
However a large number of Fianna Fail backbenchers are against it and want some of this money used on a cost of living package to help families instead.
They also say if the VAT cut is coming it should be brought into play from July 2026 - thus freeing up half a billion quid.
Bar.
News in 90 Seconds - August 16th
But Deputy Butterly said the hospitality industry is struggling and needs help.
She said the cut in the hospitality VAT rate is also part of the programme for government and must be delivered.
She stated: 'Our SMEs are the fundamental employer in our economy and the tourism sector plays a very significant role in this, especially in regional areas.
"While I fully support the VAT reduction I would hope to see their customers benefiting from this with reduced prices.
"It is vital we protect and support employment in this sector but we also need to ensure that people coming through their doors see the benefit of the reduction as well."
However the hotel, bars and restaurants say if the VAT rate is cut they they need to keep the cash to survive.
They argue their costs from food to energy have soared in recent years and they have had no option but to hike up prices to stay in business.
They say if they get the VAT rate cut it will mean no job losses and pubs especially in rural Ireland will survive.
Adrian Cummins the CEO of the Irish Restaurant Association said the Government decision to increase the VAT from 9pc back up to 13.5pc in September 2023 was catastrophic for the whole industry.
He said: 'Restaurants, cafes and food businesses operate on notoriously tight margins. The average profit margin goes between 3 to 5pc in good times and far less in rural parts during the off season.
"The increase of 4.5pc was a massive blow. A lower VAT rate supports job security, keeps wage bills manageable, and allows businesses to invest in training and growth.
"It is not a gift but an investment in Ireland as a tourist destination."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Examiner
3 hours ago
- Irish Examiner
Fine Gael battle for presidential nomination set to reopen
Fine Gael is to open a second nomination process for the presidency, with two senior party members — who previously ruled out a run for the Áras — set to battle it out for the candidacy. The sudden withdrawal of Mairead McGuinness on health grounds has left Fine Gael in disarray, but former social protection minister Heather Humphreys is expected to announce her intention to seek the nomination this week. Ms Humphreys, who opted not to contest last year's general election, said in May that she would not run for the Áras following her retirement to spend more time with her family. However, in the last few days she has indicated she is considering joining the race, with sources saying she is in the process of building a campaign team. There is a growing feeling among senior members of the party that if she puts her name forward, the Monaghan woman 'has a very real chance' of winning the presidential election. Three Independent ministers back Ms Humphreys A potential run by Ms Humphreys has already received the backing of three independent ministers, with Michael Healy Rae saying he would back her "wholeheartedly", with Seán Canney saying he hoped Ms Humphreys would consider a run, while Noel Grealish said that she would be an "excellent" president. Former GAA president and Ireland South MEP Seán Kelly is also reconsidering his position and could spark an internal vote. Mr Kelly ruled himself out in July but, following the withdrawal of Ms McGuinness, he said over the weekend the "goalposts have now changed". Within the party, there is a belief that Mr Kelly was 'very interested' in pursuing the nomination last time around and would be once more. However, some believe the time constraints could mean he stands aside for Ms Humphreys. Former GAA president and MEP Seán Kelly is also considering a run for the Áras, saying over the weekend that 'the goalposts have now changed' since the withdrawal of Fine Gael nominee Mairead McGuinness. File picture: Jonathan Brady/PA The party's executive committee will meet on Monday evening to set out the process for nominating a replacement for Ms McGuinness. One member of the party's executive, Dublin MEP Regina Doherty, said if there were two candidates, the party should have a competition. Ms Doherty told RTÉ's This Week while the timeframe was "tight" and Fine Gael is "under time pressure" she said the party was confident it could run a contest. "Time is of the essence, lots of people are still on their holidays is what maybe makes it a little more difficult. "We will deal with whatever is put in front of us. We will open the contest and we will see how many contenders there are and then decisions will be made based on timelines thereafter," she said. Ms Doherty denied that the previous withdrawals of Mr Kelly and Ms Humphreys from the race would be a negative in the eyes of the public. She said those decisions had been made in a context which has now changed, a feeling which is echoed in Fine Gael. "Heather Humphreys or Sean Kelly are not second choices," a party source said. Fianna Fáil faces 'changed landscape' While Fine Gael sources say they would prefer longer to have a replacement in place, the party is ahead of both Fianna Fáil and Sinn Féin, neither of which has confirmed if it will run a candidate at all. The withdrawal of Ms McGuinness has 'completely changed the landscape', a Fianna Fáil source said, with one saying that Ms Humphreys would 'be a different challenge altogether'. A Fianna Fáil TD said, however, that they could not foresee a situation in which the Fianna Fáil parliamentary party supports a coalition 'unity' candidate. Fianna Fáil is expected to name its candidate in September. Sinn Féin may back Catherine Connolly Within Sinn Féin, sources said, there is a growing belief that the party will support Galway West TD Catherine Connolly rather than run its own candidate. Ms McGuinness's withdrawal means Ms Connolly is the only candidate who at present has the requisite support to be on the ballot to succeed Michael D Higgins later this year.
Irish Times
8 hours ago
- Irish Times
The Irish Times view on Ireland's wind energy: a fight for funding
Ireland is making slow but steady progress towards ambitious renewable energy targets, but challenges remain – including a more competitive market for attracting private investment. The latest report from Wind Energy Ireland shows that wind energy supplied 24 per cent of the country's electricity needs last month, the third best performance for July on record. According to the Government's offshore renewable energy targets, the objective is to reach 37 gigawatts of wind energy by 2050, which would be enough to cover by a factor of six the current peak demand for electricity in Ireland. There is a lot riding on reaching these targets. The goal of a secure, cost-effective supply of energy remains some way off. Senior multinational companies have warned that future investment relies on this. Moreover, if Ireland does not meet EU-agreed CO2 reduction targets from 2030 onwards, it could be liable for billions in fines. Some of the challenges are homegrown. For example, according to the latest report from Wind Energy Ireland, roughly 14 per cent of the electricity that could have been generated by wind last year was lost due to limited grid capacity. Also, several important wind energy developments have been delayed by planning logjams. READ MORE The Government has earmarked €3.5billion to upgrade the energy infrastructure and reforms to the planning system have improved timeframes on planning applications for wind developments. It is important that there is continued improvement in both of these areas, as one of the main external challenges is access to funding. Recently, the Danish government had to backstop a $9.4billion rights issue by Orsted, the renewable energy developer, as it needed capital to complete US developments. Donald Trump's 'drill baby drill' approach energy policy has caused many investors to switch from renewables back to fossil fuels. Ireland needs billions in investment to develop its offshore wind potential. An efficient infrastructure and planning system is essential to attract future investment in a competitive marketplace for funding.
Irish Times
9 hours ago
- Irish Times
Serbian leader vows tough response against protesters after riots
Serbian president Aleksandar Vucic has announced tough measures against anti-government protesters following days of riots in the streets of Serbia that have challenged his increasingly autocratic rule in the Balkan country. In one of his frequent TV addresses to the public, Mr Vucic accused the anti-government demonstrators of 'pure terrorism' and reiterated his claims that months of persistent protests against his rule have been orchestrated in the West and aimed at destroying Serbia . 'Our country is in grave danger, they have jeopardised all our values, normal life, each individual,' said Mr Vucic, alleging an elaborate scheme that would eventually install 'anarcho-leftist' authorities in the future. He did not offer any concrete evidence for his claims. Supporters of Serbian president Aleksandar Vucic hurl flares at protesters during an anti-government protest. Photograph: Darko Vojinovic/AP 'Unless we undertake tougher steps, it is a question of days when they [protesters] will kill someone,' said Mr Vucic. 'I am saying this for history.' The stern warnings came after five consecutive nights of clashes between the protesters on one side and police and Vucic loyalists on the other. Angry demonstrators on Saturday evening torched Mr Vucic's governing Serbian Progressive Party offices in a town in western Serbia, and those of other ruling coalition allies. The demonstrators also clashed with police in Belgrade, the capital, and in the northern city of Novi Sad. Riot officers used tear gas against protesters who hurled stun grenades, flares and bottles at them. [ Serbian protesters and president trade 'civil war' warnings after street clashes Opens in new window ] Mr Vucic did not specify the state response that he said would come within a week. But he stressed that a state of emergency is not imminent. Scores of people have already been detained and injured in the past days, while police have faced accusations of excessive force and arbitrary detentions of protesters. 'You will witness the determination of the state of Serbia,' said Mr Vucic. 'We will use everything at our disposal to restore peace and order in the country.' The clashes last week marked a significant escalation following more than nine months of largely peaceful demonstrations that started after a concrete canopy collapsed at a train station in Serbia's north, killing 16 people. Many in Serbia blamed the incident on alleged widespread corruption in state-run infrastructure projects that they say fuelled poor renovation work. The Serbian president has faced accusations of stifling democratic freedoms while allowing organised crime and corruption to flourish. He has denied this. Serbia is formally seeking EU membership, but Mr Vucic has maintained strong ties with Russia and China. On Sunday, he praised Russia's backing for his government against what he called a 'coloured revolution' against his government.
