Seán Kelly, MEP for Ireland South and Leader of Fine Gael in the European Parliament, is calling on the Government to reinstate the 9% VAT rate for the hospitality sector. His appeal comes in response to the ongoing financial strain faced by restaurants, cafes, and retailers due to rising operational costs.
“Reinstating the 9% VAT rate is crucial for many small businesses in our hospitality sector,” said Kelly.
“The increase has placed an additional strain on these businesses, many of which are already struggling to cope with higher wages, energy bills, and other escalating costs.”
The Government had reduced the VAT rate to 9% in 2020 to support the hospitality sector during the pandemic, but it reverted to 13.5% last August. “This temporary relief provided a lifeline to countless businesses,” Kelly noted. “However, although we are in a better now, with the current economic climate for the sector, a return to the 9% rate to prevent further closures and job losses.”
Kelly argues that the benefits outweigh the costs of a return to the 9% VAT rate.
“Investing in the sustainability of our small businesses is essential. The long-term repercussions of continued closures would be far more damaging to our economy. By alleviating the pressure on businesses, we can avoid passing on costs to consumers, thereby protecting disposable income and maintaining competitiveness,” said MEP Kelly.