Rise in VAT rate is causing major problems and stress for businesses across Tipperary

The new VAT rate in the hospitality sector is causing major problems for those involved in tourism around the county.

The issue was raised at the September meeting of Tipperary County Council where a motion was raised that Tipperary County Council support the reintroduction of the 9% VAT rate for food related businesses, and that they call on the Minister for Finance to extend the 9% VAT rate to the end of 2024.

Speaking on the matter Councillor Declan Burgess said the new VAT rate, which was due to rise to 13.5% from September 1, has eroded Ireland's competitiveness in being a tourist destination. He said businesses will not be able to sustain this VAT rate and added that businesses in the county will see job losses on the horizon if the VAT rate issue is not addressed urgently:

“I suppose it is worth noting that since Covid, the recovery of the hospitality sector has been slower than other sectors. We will see job losses if the VAT rate stays at 13.5 %.”

Cllr Mark Fitzgerald agreed said it had a knock on effect on everyone, pointing out that couples “are choosing hotels in this county to celebrate their wedding day with family and friends, have factored in costs and prices for what this will cost but now hotels are coming back and saying they have no choice but to add on the extra costs on food and products.”

After consulting with some couples preparing for marriage he reported that they feel overwhelmed by the costs involved now.

Councillor Sean Ryan supported the motion and felt: “many local businesses like the hairdresser and pharmacists are affected by it too. Chip shops and other local businesses are struggling to survive.”

Councillor John Carroll said energy companies have changed their approach in recently and stressed that it would be a positive move for Tipperary if the rate was kept at 9%. Every business was directly or indirectly affected he said:

“In every town and village in the country between the barbers, the hairdressers, the hospitality sector and the wider field, they really stimulate. They bring about vibrancy in every town and village.”