Relief is finally on the way for businesses in the hospitality sector, with a long-running campaign to reduce VAT set to succeed in October’s Budget.
Hundreds of pubs and restaurants have shut down since the Government ended the 9% VAT rate introduced during the pandemic to support the industry. The rate was raised to 13.5% in 2023, adding further pressure on struggling businesses.
Despite calls to reinstate the lower rate, the Government resisted making changes last October and did not include it in the programme for Government following the General Election.
However, hospitality groups have continued to push for support, arguing they were overlooked while other industries received assistance during the cost-of-living crisis.
Today, Finance Minister Paschal Donohoe confirmed the 9% rate will be reinstated in the upcoming Budget.
Fine Gael TD John Clendennen welcomed the move and said he would work with the Minister to ensure a smooth rollout.
“We have been steadfast in our support for businesses, whether during Covid, the ongoing war in Ukraine, or the challenges of inflation and rising energy costs," he said.
"This measure provides much-needed certainty to a sector that has faced relentless challenges."
