TD calls for VAT and PRSI rate cut for struggling SMEs - Kilkenny Live

Cafes, restaurants and other community hubs will be forced to close over the coming months if VAT and PRSI rates are not cut for small and medium sized businesses.

Deputy Michael Lowry addressed the Dáil last month on the dramatic level of closures across the hospitality and SME sectors and said that some Government decisions had ‘unintended consequences’ and, if not revisited, the shutters would fall on many more cafes, restaurants, shops and vital community hubs in the month ahead.

Land leasing auction results from auction held in Castlecomer, Kilkenny

He referred at that time to his previous representations to Government concerning the dramatic level of closures across the Hospitality and SME Sector, reiterating that it is absolutely crucial and essential that the Government brings forward changes for this sector.

Now Deputy Lowry, along with his colleagues in The Regional Group of TDs, are calling for the reduction of the current VAT rate of 13.5% to 9% for food businesses in the hospitality sector before Easter. 

In a Private Member Motion before the Dáil this week, they also say that adjusting the 8.8% employer’s PRSI threshold to a ceiling wage of €495.30 per week will be a lifeline for many businesses. 

Collectively, the members of The Regional Group of TDs support Small and Medium Enterprises, that are struggling to keep their doors open due to recent Government charges and in recognition of the vital role that these businesses play in our local economy and communities.

The Regional Group’s motion calls on the Government to immediately establish a Task Force that is representative of small businesses and includes Government Departments and Agencies. Such a Task Force should be personally Chaired by the Cabinet Minister, and aim to review the application of all Government controlled costs and to reduce Government charges and costs of doing business. 

The Regional Group of TDs notes that providing quarterly updates to the Joint Oireachtas Committee on Enterprise will ensure that this will be a Task Force for action and not talk. 

‘SMEs’ are a critical pillar of the Irish economy. The people who create and lead SMEs throughout the country are incredibly diverse and come from family-owned businesses, rural-owner managers, and traditional to high-growth and technology start-ups. 

‘There are more than 1.2 million people employed by SMEs in Ireland representing 99.8% of active enterprise. Most of these enterprises are micro-sized enterprises, employing less than 10 people.

‘Government policy decisions have increased the cost of doing business significantly, particularly in the SME sector. Many SMEs, including rural and Regional businesses, are facing significant cost challenges. These increasing input costs due to increases in energy, inflation, insurance, cost of labour, national minimum wage increases, higher PRSI, plans for pension auto-enrolment, extended sick-pay entitlements on top of VAT increases, along with many other input factors are making it very difficult for small businesses to continue trading. 

‘Regional Group members call on the Government to address these business issues now before additional closures occur in the hospitality, retail, travel, food, drink, tourism, and entertainment sectors’