Hospitality businesses should be afforded the benefit of a lower VAT rate on food services, if they are to continue to survive and thrive, two Fine Gael politicians have warned.
Fine Gael's Senator Garret Ahearn and Deputy Ciaran Cannon have published a call for the return of the 9% VAT rate for food-led hospitality businesses.
Reduced VAT Rate
Senator Garret Ahearn, Seanad Spokesperson on Enterprise, Trade and Employment, said the hospitality sector previously benefited from a reduced VAT rate, a measure that was crucial during several crises.
He noted that many of Ireland's food-serving pubs, restaurants and coffee shops are family businesses, in some cases, who have been trading for generations.
'Unique Economic Pressures'
"Their contribution to the fabric of the community is more than just economic and our business policies must go further than ensuring survival, they have to be enabled to thrive," said Senator Ahearn.
“A tailored VAT rate for food services could provide much-needed boost to these vulnerable businesses that face unique economic pressures.”
ICOB Grant Scheme
Deputy Ciarán Cannon claimed he has raised the VAT rate issue with the Taoiseach who confirmed that such a reduction "is technically possible and it warrants consideration."
The deputy also called for the government to announce details of the €257 million Increased Cost of Business (ICOB) grant scheme, which has been made available to inject cash into small businesses.
“We have to acknowledge that right now there are cafes and restaurants across Ireland fighting for their survival," said Deputy Ciarán Cannon.
"They are encountering the perfect storm of cost increases and they need support.
"We can and should respond by reducing the VAT rate on food service to 9%."
The Restaurants Association of Ireland (RAI) has issued a statement saying that while the comments from the Taoiseach, Deputy Cannon and Senator Ahearn are positive, the RAI now looks forward to seeing 'swift and decisive action' being taken by Fine Gael and its government colleagues to reinstate the 9% VAT rate for food-led hospitality businesses.
The association believes this is what is needed to 'stem the tide of restaurant and café closures' and secure a viable future for the industry.