5 days ago
‘It's important to keep it sustainable': Burke defends plans to cut VAT for hospitality sector
Minister for Enterprise, Tourism and Employment Peter Burke has defended plans to cut VAT for the hospitality sector.
The planned decrease would see
VAT
fall to 9 per cent at a cost
cost to the exchequer
of €545 million.
'The
tourism sector is a very important part of the economy. At this point in time, over 200,000 people are employed in it. It's a €9 billion sector. And it's so important to try and keep that sector sustainable,' he told RTÉ's Today show.
'We've seen over the last number of years a very significant number of independent small food outlets and coffee shops come under pressure, many restaurants closing their doors. But this is a jobs measure to sustain the employment in that sector,' he said. .'
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'I've been in coffee shops and indeed restaurants where I've seen their margins diminish and some making a very significant loss that they weren't the prior year, considering in many cases their trade and turnover has sustained.'
The Minister said the best value for money would be to sustain jobs.
The Restaurant Assoication of Ireland's new president, Sean Collender, told the Today showthe VAT reduction would be an important step to support the industry. He outlined the challenges faced by it including rising costs such as labour, energy, and other operating expenses.
He also spoke of the need for a broader framework and support from the Government to help the hospitality industry remain viable, beyond just the VAT reduction. This includes addressing issues like the risk-reward ratio for opening businesses and the high failure rate in the industry, he said.
Mr Collender also spoke about the difficulty in guaranteeing price stability or reductions for customers, even with the VAT reduction. He said this is due to the significant cost pressures the industry is facing because of rising costs, especially for property/rent and on the ability of hospitality businesses to provide a good standard of living for their employees.
