octobre 21, 2021

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Hospitality groups express disappointment at the end of the reduced value-added tax rate next August

Lobby Groups representing the hospitality industry have expressed disappointment that the reduced value-added tax rate for the sector will expire next year.

Finance Minister Pascal Donohoe today confirmed that the 9% rate will expire – as planned – at the end of August 2022.

Tánaiste Leo Varadkar noted that Labor wage support system The business will run until the end of April 2022, but several hospitality groups have expressed disappointment after the value-added tax news.

The Irish Hotel Association has called on the government to extend the 9% rate until beyond 2025 in order to protect the recovery and competitiveness of outbound tourism.

Adrian Cummins of the Restaurant Association of Ireland said the 2022 budget had been “disastrous” for the industry.

“This budget is a disaster for our members and restaurants, cafes and catering bars, and it is a vital component of our tourism offering.

“Ending the value-added tax rate and wage subsidies will be a nail in the coffin for many hospitality companies this winter,” Cummins said.

“While the budget support is welcome, there are still some long, challenging months ahead.

“Since putting in place lockdown measures and restrictions, our industry has adhered to the rules.

“Public safety and worker safety has always been at the top of our agenda. But this means serious financial hardship for many.

“We needed the government to help us in the fight to survive, today’s announcements are less than that and we will need continued support to get out of this,” Cummins concluded.

The licensed Vintners Association (LVA) said the budget was generally positive for the hospitality sector but warned that a value-added tax increase next September would be a serious problem.

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“Overall this has been a generally positive budget for the hospitality sector,” said Donal O’Keefe, CEO of LVA.

“Extending the price waiver and retaining wage subsidy subsidies will provide some stability to businesses that have been effectively closed for most of the past 18 months and are still operating with severe restrictions in place.

Looking ahead, we are concerned about the implications of the decision to increase the value-added tax rate from next September.

“This will have a significant inflationary impact on hospitality costs from next fall onwards, with the level of value-added tax actually being levied due to it being 50% higher.”

Varadkar said the industry would benefit from the extension of the exemption from rates, employment support and the reduced rate until next August.

The Wage Subsidy Scheme will remain in effect until April, so we will help pay most restaurants in the country until then.

“I appreciate that they want us to do more than that,” he said, “but we need to stay within the confines of what’s within everyone’s reach.”