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Last push to restore 9% hospitality VAT rate with discussions 'ongoing'

Sources state that as talks stand right now the reintroduction of the lower VAT rate is ‘unlikely’.

A MONTH AGO, Public Expenditure Minister Paschal Donohoe rejected calls to restore the 9% VAT for hospitality, but one day out from the budget and it appears to be up for discussion. 

Enterprise Minister Peter Burke has been pushing for the 9% rate to be reintroduced for certain hospitality businesses. The previous 13.5% rate was reinstated last August, despite the sector’s opposition.

It is understood the minister wants accommodation businesses to be excluded from the any reduced VAT rate and for the reduced rate to only apply to restaurants, bars and hairdressers.

Such an idea was floated ahead of last year’s budget, however it is believed the Revenue Commissioners said it would be too complicated to separate the two sectors. 

Fianna Fáil sources state that such a measure was not included in the published Summer Economic Statement, adding that any such last minute move would be complicated and cost a lot of money. 

Fine Gael sources state while discussions are “ongoing”, currently where the talks are at, it appears “unlikely” that the VAT rate will reduced. 

Adrian Cummins from the Restaurant Associations of Ireland (RAI) told The Journal that his understanding from speaking to senior officials is that the matter is still being deliberated and no decision has been reached. 

He said there is “no excuse” for the government not to deliver on what the hospitality needs to survive, stating that the country is “awash with money”.

He said if the measure goes ahead, his understanding is restaurants and hotels will be decoupled. 

Speaking to Newstalk Breakfast today, Enterprise Minister Peter Burke said the government understands that the most vulnerable sectors are hospitality and retail.

He said that is the sector where three quarters of minimum wage workers are, stating there is a need for government to intervene to assist those businesses.

“I’m very focused on that, and I’m still working [and] trying to ensure that we have a very strong response to that sector,” he said. 

“I think it is no secret my views on the issue,” said Burke. 

In July, the Department of Finance pushed back hard against the restoration of the 9% VAT rate, stating in budget advisory papers that there are a “number of reasons” why going back to 9% “remains unjustified”. 

It listed the cost to the state, the resilience of the domestic economy, and Ireland’s current position as being “not significantly out of line with other EU countries in relation to the application of VAT in this sector” as among the reasons.

“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,” it said.

It said that even if measure were restricted to food and catering services, it would still have an estimated full year cost of €545 million.

Restaurants and cafes have said they struggling with higher business costs and in some cases reduced demand exacerbated by the increased cost of living, with many in the industry perceiving the reinstated higher VAT rate as a significant pressure on their businesses

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    Mute Seamus Balfe
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    Jun 12th 2024, 4:42 PM

    Far left

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    Mute Kieran Duffy
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    Jun 12th 2024, 5:39 PM

    @Seamus Balfe: That’s what we need more of.

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    Mute Old Jim
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    Jun 12th 2024, 3:56 PM

    They are having a slash against the wind

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    Mute SV3tN8M4
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    Jun 12th 2024, 6:55 PM

    Far Left vs Far Right, Muslim population wanting their own laws, France is on the edge & will be the first European country to descend into chaos. Macron warning about Putin & the Far Right, when the fact is, he failed the French people in his terms of office & France has splintered since under his watch. Putin doesn’t have to consider invading Europe, as it will destroy itself from within, led by incompetent leaders like Macron. Amazing how the Far Left are seen as acceptable, even the French Communist party, considering the history of Communism & the massacres inflicted on people.

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    Mute Gerald Kelleher
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    Jun 12th 2024, 7:07 PM

    @SV3tN8M4: I see reactions from people who are unaware that policies on climate modelling or immigration are influenced by the academic community acting through social politics.

    Left and right politics are governed by forces people do not sufficiently appreciate. Even though the combination of civil laws and laws of nature (Enlightenment) was meant to replace monarchies and church hierarchies, it was based on awful foundations in the late 17th century.

    We inherit the worst and most unstable part of that subculture with many as victims. 

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    Mute Alex
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    Jun 12th 2024, 4:36 PM

    A win of RN seems inevitable and that’s a good thing.

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    Mute John D Doe
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    Jun 12th 2024, 4:09 PM

    White flag

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    Mute SerotoninWars
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    Jun 12th 2024, 7:12 PM

    The new Netflix doc about the Nazi’s – ‘Evil on Trial’ is really good, even if you’ve seen a lot on the subject already. We can never have enough ‘timely reminders’ about what happened. Right now it really is timely. So many of the same things are being said, spouted and dispersed but on a much larger scale. The disinformation is turbo charged.

    One of the main things that comes across is how much disbelief there is within the larger more apathetic populace. They assume there will be enough safeguards in place and that authoritarians aren’t fully serious when they clearly tell you what they are going to do if put in a position of power.

    There’s lots of incredible footage that really drives home (once again) how easily people are caught up in frenzies, if it looks like a large enough crowd are behind a movement.

    You can see the seeds being planted here with all of the obvious accounts that are there to pump one part of the Irish media with far right ideas on top of X/Twitter, Facebook and all the rest. There’s so many lies being told and as ever with the far right all your problems will allegedly be solved by getting rid of a certain group of people. As if. Simple ‘solutions’ for the simple minded. You might be annoyed about current problems in your society but far right is never ever the way to go.

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    Mute Larry Roe
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    Jun 12th 2024, 10:26 PM

    @SerotoninWars: or have a look at the tattooist of austwhich

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    Mute Jack Hayes
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    Jun 12th 2024, 4:56 PM

    Good. Keep the demons out.

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    Mute Alan Kennedy
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    Jun 13th 2024, 2:42 AM

    I for one think that The Judaen People’s Front are better than The People’s Front of Judea!

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