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Extra.ie
2 days ago
- Business
- Extra.ie
Plan to cut VAT on hospitality sparks ferocious row between ministers
A spat between the Coalition parties over Fine Gael plans to cut VAT on hospitality to 9% has developed into a 'a ferocious row'. Simmering tensions about where budgetary cuts will land this autumn came to the fore last week between Fianna Fáil and Fine Gael over the issue of VAT cuts. After years of record spending increases, the review prior to the Summer Economic Statement came as a shock to ministers. Senior Fianna Fáil Minister of State Niall Collins. Pic: Gareth Chaney/Collins Photos In an extraordinary attack on the proposal, which would devour two thirds of the money allocated to tax cuts, the senior Fianna Fáil Minister of State Niall Collins said luxury and five-star hotels benefiting from a universal rate reduction to 9% would sit 'very, very uncomfortably with me'. However, Enterprise Minister Peter Burke has doubled down in his determination to see the €1billion cut through. He told 'The reduction on VAT is a promise we made to the hospitality sector in good faith. I am fully committed to its delivery as it is core and central to sustaining the 228,000 jobs in that sector, many of which are in regional locations. Enterprise Minister Peter Burke. Pic: Sam Boal/Collins Photos 'The tourism sector is a €9billion industry and one which I am focused on supporting particularly with our new tourism strategy which will be published in September.' But one Fianna Fáil minister said of the proposal: 'Fine Gael once again appear to be forgetting they are the junior partners. They do not decide tax policy and they certainly are not going to be allowed to create a scenario where the public will be furious over a measure that will only benefit a few coffee shops.' Tánaiste Simon Harris, Taoiseach Micheál Martin and Sean Canney, Independent TD for Galway East, speaking at a press conference for the launch of the Government's Summer Economic Statement and the National Development Plan for the next five years. Pic: Niall Carson/PA Wire Responding to Fine Gael plans to front-load the cuts during Micheál Martin's term as Taoiseach, one Fianna Fáil senior figure warned: '(FG leader) Simon Harris may want to be the new Bertie Ahern but he won't do it at our expense.' In a further indication of the new levels of tension surrounding expenditure, a number of legal challenges are being prepared by representative groups in the education sector should the Coalition fail to adequately fund schools. One education sector source said: 'There is trouble and underspending across the board, from primary education to third level. Serious trouble is coming down the tracks if ministers don't perform. 'We don't do press releases or complaints on the Order of Business. We are going to hold the Government to account over their legal responsibilities and we are prepared to take the legal route to defend the fiscal integrity of schools and the State's legal obligations to deliver appropriate facilities for children.' Taoiseach Micheál Martin. Pic: Sasko Lazarov/ The proposed challenges will increase concerns within the Government that it faces a destabilising summer of internal discontent over fears that Ireland faces its first austerity budget in a decade. One senior Government source said: 'Paschal [Donohoe] and Jack [Chambers] are engaged in a great act in expectation management. There is a great tidying-up process: all the cycle lanes, all that green stuff, we are not wasting that money.' Another senior Government figure added: 'The budget will be factually expansionary, look at the figures. We are, however, laying down the marker in the Summer Economic Statement to stop runaway stories.' However, Cian O'Callaghan, Social Democrats acting leader and finance spokesman said: 'It is clear that after the big giveaway pre-election budgets, citizens are facing difficult times. Cian O'Callaghan, Social Democrats acting leader and finance spokesman. Pic: Gareth Chaney/Collins Photos 'The Government can spin all they want about returning to normality. The truth though is that people experiencing the frontline of the cost-of-living crisis are and will experience the very real return of austerity budgeting.' Despite attempts by Government ministers to calm their TDs, unease remains high within the Government ranks. One Government source said: 'There are billions of one-off payments facing the axe and it is not going to be pretty. 'Look at James Lawless, he let the cat out of the bag too early on third level registration charges and he hasn't been seen since, he has disappeared.' However, a Fine Gael minister said: 'There's no great plot against Fianna Fáil, it is simple logic. When it comes to cutting, do you want to be unpopular now or would you prefer to be unpopular in five years' time. Our friends need to calm down.' Minister of State James Lawless. Pic: Sasko Lazarov/ The pre-budget negotiations could be a chance for Mr Chambers to put himself in position for a future leadership bid. A FF source said: 'There may be a bit of leadership-building going on with Jack [Chambers] as well. At some stage Micheál has to go and let's face it, at 64 he is nearer the end than the beginning.' Another Fine Gael source noted of 34-year-old Mr Chambers: 'He hasn't made too many friends in Fine Gael going around the place being led by the nose by his officials. Even the Tánaiste had to battle for Defence spending.' Unease is also growing within Fianna Fáil with sources speculating that succession factors may be at play when it comes to the vigour with which Mr Chambers is going about his task. The source added: 'There is a bit of an invisible leadership competition building up between Jack and Jim O'Callaghan. Big Jim is going very well at the moment so Jack may be trying to out-do him by generating a reputation as a great reformer of the public finances.'
Irish Times
5 days ago
- Business
- Irish Times
Cold reception for hospitality VAT rate
Sir, – Limerick TD and Minister of State at the Department of Justice Niall Collins has said luxury and five-star hotels benefiting from a universal VAT rate reduction to 9 per cent would sit 'very, very uncomfortably with me', drawing a critical response from Fine Gael (' Fine Gael irked by Niall Collins's dismissal of blanket VAT cut for 'price-gouging' hospitality sector , July 24th). Recently, I ordered a glass of Pinot Grigio with my food at an establishment in Kerry. I was charged a whopping €9 for my little indulgence, while my food came to a reasonable €21. My bigger surprise though was what looked like a pub serving food when I walked off the street, was, in fact, a hotel. READ MORE Afterwards, at a traditional old-style pub, not too far away, I asked the bartender how much they charge for a glass of Pinot Grigio? It was €7.20. Fair play to Niall Collins for highlighting once again the madness of applying universal tax reductions across the board. – Yours, etc, TOM McELLIGOTT, Listowel, Co Kerry.
The Journal
5 days ago
- Business
- The Journal
Government urged ‘not to delay solemn promise' of VAT cut for hospitality sector
THE GOVERNMENT HAS been urged 'not to delay its promise' of cutting the VAT rate for the hospitality sector to 9% in the upcoming budget. Despite election promises and ministerial pronouncements, government this week has been signalling that a cut to the VAT rate for the hospitality sector may not go ahead in Budget 2026. Tánaiste Simon Harris said the government had made a 'solemn' commitment in the election to reduce the VAT rate for the hospitality sector, but this week the government has been sending mixed signals on how it will proceed. Speaking to RTÉ Radio 1 yesterday, junior justice minister Niall Collins said the VAT cut was not a 'done deal'. VAT for the tourism and hospitality sectors was reduced to 9% during the Covid-19 pandemic at a cost of €1.2bn to the exchequer. The previous 13.5% rate was reinstated last August, despite the sector's opposition. Retail Excellence Ireland (REI), the largest representative body for the retail industry in Ireland, has called on the Government to follow through on its 'promise to permanently cut the rate of VAT for the hospitality industry to 9% in Budget 2026'. Jean McCabe, CEO of REI, said that 'after a tough few years, the Government's solemn promise to cut the VAT rate for the hospitality industry was welcome'. 'It would be regrettable for it to delay its promise now,' she added. 'There are too many livelihoods at stake not to introduce a measure as soon as possible that would have such a significant impact on the industry, and on related industries such as retail.' She said the government must do 'everything in its power to strengthen our domestic economy at a time when we need it most'. McCabe also called for the general rate of VAT be cut from 23% to 21% to assist the retail industry. Advertisement Meanwhile, the Irish Hotels Federation (IHF) has criticised the 'deeply misleading' figure of €1 billion per year that was quoted earlier this week regarding the cost to the Exchequer of reducing VAT for hospitality businesses. On Tuesday, during a press conference on the Summer Economic Statement, Minister for Finance Paschal Donohoe told reporters that the one-year cost for reducing the hospitality VAT rate to 9% for restaurants and hotels would be between €950mn and €1bn. However, later in the press conference, Donohoe said he would need to clarify if that figure did include hotels. A spokesperson for the minister told The Journal today that, based on CSO data, the total one-year cost for restaurants and hotels is actually €810mn. This is split €675mn for restaurants and cafes and €135mn for hotels. The cost for hairdressers would be an additional €40mn. IHF Chief Executive Paul Gallagher said it's time for an 'honest and balanced debate' that 'recognises the economic and social importance of hospitality food service businesses and gives them a fighting chance to survive'. He noted that the 'true cost involved is significantly lower than the widely quoted €1bn figure cited by the Government in recent days' Gallagher added: 'The Government's narrative has had the effect, intended or otherwise, of driving a wedge between the public and the hospitality industry, framing the VAT reduction as a giveaway to businesses. 'This is extremely divisive and simply not true.' He said the 9% VAT reduction sought would apply to prepared food services, such as meals in restaurants, takeaways, commercial kitchens and food served on transport. 'The real beneficiaries are small food businesses,' said Gallagher, 'many of which are operating on the brink of survival due to extreme food cost inflation and shrinking margins. 'Reducing VAT on food services is not a handout to hospitality businesses – it is a vital intervention for a sector that supports over 270,000 livelihoods and contributes significantly to the economy.' Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
Irish Times
6 days ago
- Business
- Irish Times
Fine Gael irked by Niall Collins's dismissal of blanket VAT cut for ‘price-gouging' hospitality sector
A row has emerged between 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. READ MORE 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.
Irish Independent
16-07-2025
- General
- Irish Independent
Thousands of Limerick families urged to check eligibility for government payment
The Back-to-School Clothing and Footwear Allowance, given by the Department of Social Protection, provides financial support to eligible families with the cost of school uniforms and footwear ahead of the upcoming term. Last year, 6,618 Limerick families received the payment, and a similar number is expected to benefit again this year. The allowance is set at €160 for children aged 4 to 11, and €285 for children aged 12 and over in second-level education. In total, over 126,000 families across Ireland will receive payments this week, covering more than 221,000 children, with more than €47.5 million being distributed. Eligible families who qualify automatically will be notified by post or via their account. Those who have not received a notification are encouraged to apply before the September 30 deadline. Manual applications will be processed and paid once eligibility is confirmed. Welcoming the payments, Minister of State Niall Collins, Limerick County TD, said the scheme offers much-needed support: 'Over 6,000 families in Limerick received these payments last year which demonstrates the extent to which they are really making a difference. 'These back-to-school clothing and footwear allowance payments are a really welcome help to eligible families in meeting the costs associated with children starting and returning to school.' Application details are available through the Department of Social Protection website or
