Latest news with #VATcut
Irish Times
4 days ago
- Politics
- Irish Times
Will Fianna Fáil and Sinn Féin abstain from the presidential race?
Ellen Coyne and Pat Leahy join Hugh Linehan to look back on the week in politics: With Independent TD Catherine Connolly and former MEP Mairead McGuinness having declared their candidacy, there will now be at least two names in the race for the Áras. But with no sign yet of a clear candidate for Fianna Fáil or Sinn Féin, are any of the potential names currently being discussed likely to gain party support? Fianna Fáil's Niall Collins would be 'very uncomfortable' with a one-size-fits-all approach to a blanket VAT cut for the hospitality sector, given that luxury and five-star hotels would benefit from a measure they don't necessarily need. Some Fine Gael Ministers are unhappy with Mr Collins for criticising a policy that would help support entry-level jobs in rural Ireland. And as the humanitarian crisis deepens in Gaza , urgency around the Occupied Territories Bill increases. The inclusion of services is still the big question given the huge potential knock-on effects for some businesses here. Plus, the panel picks their favourite Irish Times pieces of the week: A new exhibition exploring the legacy of the Magdalene Laundries , fifty years since the release of Stanley Kubrick's Barry Lyndon , and Joe Canning's take on Tipperary's triumph in the All-Ireland hurling final against Cork.
Irish Times
6 days ago
- Business
- Irish Times
Government likely to delay VAT reduction for hospitality sector until mid-2026
The Government is likely to delay the VAT cut for the hospitality industry until the middle of next year, creating more room for tax cuts in Budget 2026. It is also possible that the lower VAT rate of 9 per cent will be extended only to hospitality – ie, food and drink in bars, restaurants and hotels – and not to accommodation. The tax strategy papers due to be published today, which inform the budget process now under way within Government, are expected to say that such a separation would be complicated, but not impossible. [ 'Economic vandalism': Unions condemn plan to cut VAT for hospitality sector Opens in new window ] Senior political sources involved in discussions on the issue stressed that it would be possible, if complex. READ MORE Minister for Finance Paschal Donohoe said at the launch of the Government's summer economic statement on Tuesday that the full-year cost for the VAT cut would be almost €1 billion – which would take up to two-thirds of the available resources for tax cuts in the budget. However, three senior sources, all with knowledge of the discussions at the top level of Government on the issue, confirmed that they expect that the VAT cut for hospitality would be introduced in mid-year, possibly on July 1st. This would dramatically cut the cost of the move for next year, creating room for other tax cuts in the budget. Current modelling suggests that the full year cost of reducing VAT to 9 per cent for hospitality and hairdressers would come to €715 million. New Central Statistics Office data out next week may drag that estimate up further, however. Will the Government's big projects survive the next downturn? Listen | 36:20 Sources indicated that an introduction halfway through the year would bring the cost down to roughly half that figure, although that could move marginally up or down due to seasonal factors. The programme for government promises measures to support small to medium-sized enterprises, in particular those in the retail and hospitality sector. It emphasises this will 'entail changes to VAT, PRSI and other measures' as part of the budget process, but does not detail specific commitments. The Department of Finance has long-harboured a deep ambivalence about the benefits of such a measure. A previous cut was reversed in 2023 and there was intensive but unsuccessful lobbying from the sector to secure another reduction in last year's budget. Tax strategy group papers from last year noted the inherent difficulties in applying different rates to the industry – namely, that the higher rate would apply to all accommodation operators, including small B&Bs and hotels, as well as 'significant practical operational concerns' including those relating to packages ranging from bed and breakfast accommodation through to all-inclusive deals. Officials last year warned these could combine to lead to underpayment of VAT and additional complexity for Revenue and taxpayers, as well as increased risk of avoidance and scope for manipulation. On Wednesday, Fianna Fáil Minister of State for Justice Niall Collins stated a personal belief that a universal VAT reduction for hospitality is 'not merited', arguing on Limerick's Live95 radio station that there was 'little to no evidence' that a previous temporary reduction was passed on to consumers. [ Does the hospitality sector really need a VAT cut? Opens in new window ] Trade unions also criticised the move, describing the suggestion that tax cuts worth up to €1 billion could be granted to hospitality as 'economic vandalism'. They also argued that the facts about the hospitality sector do not justify tax cuts, saying the sector is now growing. It comes as the Irish Fiscal Advisory Council said the Government's ongoing spending overruns amount to 'poor planning and budgeting'. It follows the summer economic statement showing that planned expenditure for this year is now expected to amount to €108.7 billion, €3.3 billion more than set out in Budget 2025. Some €90.5 billion was allocated in the budget to current expenditure, or the cost of delivering public services, and €14.9 billion to capital expenditure. Both have since increased.
BreakingNews.ie
6 days ago
- Business
- BreakingNews.ie
Minister defends plans to cut VAT for hospitality sector 'to keep it sustainable'
Minister for Enterprise, Tourism and Employment Peter Burke has been defending plans to cut VAT for the hospitality sector. '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 radio's Today show. Advertisement '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, which is critically important to me as Minister for Tourism and critically to get that regional balance because many of these jobs are located in regional parts of Ireland and it's so important that we have that growth in those key sectors.' Mr Burke said that the cut in VAT would be a stimulus measure. 'It is a viability measure, they are under significant pressure. We've had a lot of additionality from government, part of it over the last three years, in terms of regulatory requirements in the trajectory to a living wage and sick pay in so many areas that have put significant pressure on the sector and have reduced their margins. '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. 'So critically it's very difficult to ask everyone to pass it on but we need to ensure that we keep the jobs in the first place and that's the prism I look through when I have a sustainability piece like this. This is to protect all of those over 200,000 jobs. To try and grow the sector because there's a very exciting new tourism plan which we'll be bringing out in September and part of that will be an all-island food strategy and also giving Failte Ireland the power to develop the restaurant sector as well.' Advertisement The Minister said that the best value for money would be to sustain jobs. 'We've learned one thing in this economy and we've proven it. And we have been almost Teflon as a government on this. We've pushed 90,000 jobs into the economy over the last 12 months. And considering when we're at or about full employment, to put 90,00 extra households with additional income into them with more jobs is very significant. 'We have a huge amount of jobs, almost 600,000 put in since the pandemic. And that's been the premium of this government, because for any household, the route to give you a chance and opportunity to realise your ambition in life is a job. And the more good quality jobs we get into the economy as well, that's what I'm focused on with many of the different sectors we're working on, trying to ensure that we have the building blocks to sustain the high-level of high-quality jobs we have in our economy.'
Reuters
13-05-2025
- Business
- Reuters
Vietnam seeks to extend VAT cut until end-2026
HANOI, May 13 (Reuters) - Vietnam's government is seeking to extend a 2 percentage point cut in its value-added tax rate until the end of next year to support economic growth, state media reported on Tuesday. Finance Minister Nguyen Van Thang on Tuesday submitted a plan to extend the tax cut, which was due to end on June 30, to the parliament for approval during its current session, Nhan Dan newspaper reported. "The VAT cut needs to be extended to promote economic growth, support families and businesses, boost manufacturing, tourism and domestic consumption," Thang was quoted as saying, adding it would cost 121.74 trillion dong ($4.7 billion) in foregone revenue. Vietnam cut its VAT rate to 8% from 10% in early 2022 to support the economy after the COVID-19 pandemic, and has since extended it a number of times. U.S. President Donald Trump said earlier this year that VAT carried a lot of blame for America's trade deficit. ($1 = 25,951 dong)
