Latest news with #ValueAddedTax
Irish Examiner
6 hours ago
- Business
- Irish Examiner
Why Ireland's 9% Vat rate is crucial for the survival of restaurants and cafés
At first glance, Vat (Value Added Tax) may seem like just another line on a receipt. But for thousands of small and medium food businesses across Ireland — from bustling cafés in Galway to family-run restaurants in rural Kerry — that single percentage figure represents the difference between survival and closure. The debate around Ireland's hospitality Vat ate is more than a fiscal exercise; it's a matter of economic sustainability, cultural preservation, and community resilience. The 9% Vat rate for the hospitality sector, first introduced as a temporary measure in 2011 during the post-recession recovery period, has become a lifeline for food service businesses. It was re-introduced during the covid-19 pandemic to support a battered industry. Yet, despite the continuing challenges — inflation, staff shortages, rising energy costs, and shifting consumer behaviour — the Government increased the Vat back to 13.5% in September 2023. This decision, though possibly justifiable on paper, is proving catastrophic in practice. Adrian Cummins, CEO of The Restaurants Association of Ireland: 'The cost of maintaining the lower rate is far less than the long-term cost of losing these vital businesses.' File photo: Gareth Chaney/Collins Restaurants, cafés, and food businesses operate on notoriously tight margins. Unlike tech or finance, where scalability can rapidly offset costs, food businesses often juggle high fixed costs, fluctuating ingredient prices, and intensive labour requirements. The average profit margin for a restaurant hovers between 3% and 5% in good times — far less in rural areas or off-season. In this context, a 4.5% hike in Vat is not a minor adjustment; it is a significant blow. For every €100 spent by a customer, food businesses now hand over €13.50 instead of €9. That €4.50 doesn't just disappear from the books — it gets absorbed into decisions about whether to reduce staff hours, shorten opening times, cut menu items, or even shut down altogether. The importance of the 9% Vat rate is most visible in rural Ireland, where hospitality is often the heart of local economies. In smaller towns and villages, the local café or bistro isn't just a place to grab a coffee — it's a community hub, a tourist touchpoint, and an employer of local youth. These businesses don't have the footfall of urban centres and often rely on seasonal tourism to survive. A Vat hike impacts them more severely and more quickly. We're already seeing the results: dozens of closures have been reported in 2024 alone, with more expected. These aren't businesses that failed due to poor management or lack of demand — they are victims of compounding pressures, and Vat policy is one of the few levers government can adjust quickly to provide relief. Restaurants, cafés, and food businesses operate on notoriously tight margins, says Adrian Cummins, CEO of The Restaurants Association of Ireland. One might argue that businesses could simply pass the cost onto the consumer. But in a cost-of-living crisis, where inflation has touched every aspect of daily life, that is neither realistic nor fair. Irish consumers are already paying more for groceries, rent, fuel, and utilities. Restaurant prices have steadily climbed to keep pace with inflation, and pushing them higher risks deterring diners altogether. This creates a vicious cycle: higher prices reduce customer numbers, lower turnover squeezes margins further, and more businesses are forced to cut back or close. A stable 9% Vat rate acts as a buffer, giving operators breathing space to manage pricing without alienating customers. Job losses The hospitality sector is one of Ireland's largest employers, supporting over 170,000 jobs, many of them part-time, entry-level, or in areas with few alternative employment options. Students, single parents, migrants, and career hospitality workers all rely on the continued health of cafés, restaurants, and bars. When a restaurant closes, it doesn't just lose its owners money — it pulls pay cheques, tips, and livelihoods out of a local economy. By reverting to the 13.5% Vat rate, the government has inadvertently increased the risk of job losses across a sector already struggling to recruit and retain staff. A lower Vat rate supports job security, keeps wage bills manageable, and allows businesses to invest in training and growth. Tourism Ireland prides itself on offering a warm, welcoming experience to tourists, with food and drink playing a central role. Yet the higher Vat rate makes Ireland one of the most expensive countries in Europe for dining out. Our tourism competitors — Portugal (6%), France (10%), Italy (10%), Germany (7%) — all offer reduced Vat rates for hospitality. In many cases, they've retained these rates long-term, recognising their impact on competitiveness. If tourists view Ireland as prohibitively expensive, they may shorten their stays, spend less while here, or opt to travel elsewhere. Local businesses lose out, and the Exchequer misses out on the long-term revenue generated by healthy, sustainable tourism. A 9% Vat rate isn't a gift to the hospitality sector — it's an investment in Ireland's attractiveness as a destination. Targeted tax policy Fiscal discipline is essential, and of course, government needs tax revenue to fund healthcare, education, and public services. But not all tax increases are equal in their impact. The hospitality Vat rate is one of the few tools the State can use with near-immediate economic consequences. Lowering it supports hundreds of thousands of jobs, keeps local economies alive, and actually encourages compliance by keeping prices at levels where businesses can still compete. Moreover, many food businesses re-invest profits locally — paying local suppliers, sponsoring community events, supporting GAA clubs. Every euro kept in a restaurant's till multiplies through the local economy. It is a smarter, more community-driven approach than allowing closures to pile up and relying on emergency grants or welfare payments after the fact. Ireland's restaurants, cafés, and food producers have weathered a tough decade — Brexit, the pandemic, the energy crisis, staffing shortages, and inflation. To now burden them with a Vat increase during what should be a recovery period is to risk undoing years of resilience and investment. A permanent return to the 9% Vat rate is not about giving the industry a 'handout'. It's about recognising the unique pressures food businesses face and acknowledging their value — economically, culturally, and socially. The cost of maintaining the lower rate is far less than the long-term cost of losing these vital businesses. Policymakers must engage directly with industry voices and hear the stories behind the statistics. They must look not just at balance sheets but at boarded-up shopfronts, declining town centres, and struggling workers. They must remember that hospitality isn't just an industry — it's part of the Irish identity. Ireland has a chance to lead with foresight, fairness, and pragmatism. Reinstate the 9% Vat rate for hospitality — before it's too late. Adrian Cummins is CEO of the Restaurants Association of Ireland
Euronews
24-07-2025
- Business
- Euronews
EU Commission's defence loan scheme tapped by 20 member states
Twenty member states have flagged their interest in using loans issued by the European Commission to fund defence projects for an estimated total of over €100 billion, Andrius Kubilius revealed on Thursday. The Commissioner for Defence and Space said on X that he is "impressed to hear that already 20 member states will request the loans". "More than €100 billion will be requested to ramp up European defence," he added. The Commission's loan programme, dubbed SAFE, is a key plank of the 'Readiness 2030' proposal that aims to see hundreds of billions of euros invested into defence across the EU before the end of the decade. The EU's executive, which has a better credit rating than many member states, had planned to raise up to €150 billion on the markets through the scheme for member states to finance defence acquisitions together. Member states have until 29 July to officially put in a request for financing. The first disbursements are expected early next year. Kubilius did not mention which member states have already notified the Commission of their intention to make use of the scheme, but several had already publicly made their interest known, like Latvia. An additional advantage of using SAFE is that member states will not have to pay Value Added Tax (VAT) on the purchases. This is a developing story. Check back later for updates.
Daily Tribune
20-07-2025
- Business
- Daily Tribune
Bahrain's Revenue Bureau Uncovers 71 VAT Violations in Six Months
The National Bureau for Revenue (NBR) carried out 724 inspection visits across local markets in Bahrain during the first half of 2025, as part of its ongoing efforts to strengthen compliance with Value Added Tax (VAT) and Excise Tax regulations. In a statement, the NBR said these visits aim to protect consumer rights, combat tax evasion, and ensure that businesses apply VAT and excise rules properly. As a result of the inspections, the Bureau recorded 71 violations related to VAT laws, leading to administrative fines. The most common offense was the failure to comply with VAT invoicing requirements. Other violations included: Displaying prices without including VAT Not showing a valid VAT registration certificate Not issuing VAT invoices Issuing VAT invoices for goods or services that are not subject to VAT In terms of excise tax enforcement, the NBR identified 8 violations for possessing excise goods without paying the required tax. Legal actions and penalties were applied accordingly. Additionally, the inspections uncovered 8 suspected cases of VAT and excise tax evasion. Legal procedures are currently underway. The penalties for VAT evasion can include up to five years in prison and fines up to three times the evaded amount. For excise tax evasion, penalties can reach one year in prison and fines double the unpaid tax. The NBR emphasized the importance of complying with tax regulations and urged the public to report any violations. Reports can be made 24/7 via the call center (80008001), the Tawasul national complaints system, or by visiting the NBR's official website for more information.
Gulf Insider
20-07-2025
- Business
- Gulf Insider
Bahrain's Revenue Bureau Uncovers 71 VAT Violations In Six Months
The National Bureau for Revenue (NBR) carried out 724 inspection visits across local markets in Bahrain during the first half of 2025, as part of its ongoing efforts to strengthen compliance with Value Added Tax (VAT) and Excise Tax regulations. In a statement, the NBR said these visits aim to protect consumer rights, combat tax evasion, and ensure that businesses apply VAT and excise rules properly. As a result of the inspections, the Bureau recorded 71 violations related to VAT laws, leading to administrative fines. The most common offense was the failure to comply with VAT invoicing requirements. Other violations included: Displaying prices without including VAT Not showing a valid VAT registration certificate Not issuing VAT invoices Issuing VAT invoices for goods or services that are not subject to VAT In terms of excise tax enforcement, the NBR identified 8 violations for possessing excise goods without paying the required tax. Legal actions and penalties were applied accordingly. Additionally, the inspections uncovered 8 suspected cases of VAT and excise tax evasion. Legal procedures are currently underway. The penalties for VAT evasion can include up to five years in prison and fines up to three times the evaded amount. For excise tax evasion, penalties can reach one year in prison and fines double the unpaid tax. The NBR emphasized the importance of complying with tax regulations and urged the public to report any violations. Reports can be made 24/7 via the call center (80008001), the Tawasul national complaints system, or by visiting the NBR's official website for more information.
NDTV
19-07-2025
- Business
- NDTV
Tax-Free Countries: Where Your Income Remains Entirely Yours
For many, the monthly deduction of income tax can feel like a heavy burden. However, a fascinating reality exists in several countries where individuals keep every penny they earn. Unlike nations with progressive tax slabs, like India, where the highest income tax rate can reach up to 39% [The 39% figure likely refers to the effective tax rate for very high earners after including the highest surcharge rate (which can be up to 37% on tax payable for income above Rs 5 crore) and cess (4%)], these "tax-free" countries operate on a fundamentally different financial model. The Gulf's Golden Ticket Leading the charge in the zero-income-tax revolution are the Gulf countries. Nations such as the United Arab Emirates (UAE), Saudi Arabia, Qatar, Bahrain, Oman, and Kuwait do not impose any direct tax on personal salaries or income. Their governments instead rely on substantial revenue from their vast oil and gas reserves, a burgeoning tourism sector, and indirect taxes like Value Added Tax (VAT). This unique economic structure allows their populations to enjoy a truly tax-free existence, maximizing their disposable income. UAE: A Magnet for Professionals Among these, the UAE stands out as a prime example. Its economic prowess, fueled by oil and a thriving tourism industry, ensures that residents face no income tax. This has transformed the UAE into a global hub, attracting professionals from across the world who seek lucrative job opportunities combined with the significant advantage of keeping their entire earnings. Beyond the Gulf: Other Tax-Free Sanctuaries The concept of zero income tax isn't exclusive to the Gulf. Smaller, affluent nations across Asia and Europe, including Brunei, Monaco, Nauru, and the Bahamas, also offer this enticing proposition. Brunei's robust oil and gas income, and Nauru and the Bahamas' flourishing tourism sectors, provide sufficient government revenue, eliminating the need for personal income taxation. Sustaining Economies Without Direct Tax The core of these countries' financial strength lies in their abundant natural resources or powerful tourism industries. While they forgo direct income tax, they often implement VAT and other charges to cover public expenses. This distinct approach highlights a diverse global landscape of economic management, offering an interesting alternative for those looking to escape the conventional tax burden.
