Dáil Éireann Debate, Thursday - 7 November 2024
91. Deputy James O'Connor asked the Minister for Finance if he will reconsider the decision of not reducing the VAT rate to 9% for bars, restaurants and cafés that are struggling in the east Cork area; and if he will make a statement on the matter. [42979/24]
Amharc ar fhreagraAs the Deputy will be aware, in making any decision in relation to VAT rates or other taxation measures, the Government must balance the costs of the measures in question against their impact and the overall budgetary framework.
The estimated cost of the 9 percent VAT rate for tourism and hospitality, from 1 November 2020 to 31 August 2023, was over €1.3 billion.
The cost of a further temporary VAT reduction to 9 percent for a full year is estimated to be €868 million. Even where the measure is restricted to food and catering services, the estimated full year cost is €675 million.
While I recognise the difficult circumstances businesses in this sector find themselves in, the Government has taken additional measures to support businesses directly. For instance, Budget 2024 and Budget 2025 contained a number of measures to support businesses facing increased costs, including the Increased Cost of Business (ICOB) grant in Budget 2024 and the Power Up Grant of €4,000 in Budget 2025.
In addition, it should also be noted that the income tax package, which will increase the money in people’s pockets, will increase the numbers of people able to eat out.
