VAT was reduced from 13.5 per cent to 9 per cent from 2020 during the Covid-19 pandemic. It was restored in 2023. The independent deputy has warned that not returning VAT back to 9 per cent will threaten hundreds of jobs across Galway.
Grealish said there was still time for Minister for Finance Jack Chambers to listen to appeals from the sector, and from the regional group of independent TDs, of which Grealish is a member, for the return to the reduced VAT rate before the Finance Bill implements the measures announced in last week’s Budget.
“We have already lost more than 600 businesses like restaurants, cafes and other food-related ventures since the VAT rate went back up to 13.5% last September, and there must be as many and more that are barely hanging on at the moment, with rising costs seriously impacting on them and other enterprises like hotel and hairdressers, especially the small businesses that work on such tight margins.
“There are hundreds of jobs in Galway city and county in businesses that are just about managing to keep their heads above water at the moment.
“The refusal of the government to restore the 9 per cent VAT rate could prove to be the last straw — especially as we head into the lean months of winter for so many of these businesses,” said Deputy Grealish.
The Independent TD said that almost every community across the country had seen smaller local ventures like cafes and restaurants in their area close during and in the aftermath of the Covid pandemic.
“Many more have never fully got back on their feet from Covid, in the face of difficulty securing staff which may also have limited their hours of trading and the opportunity to get back in the black.
“Meanwhile, the cost of everything has increased: supplies, energy, insurance, staff. They are also facing increased costs when the rise in the minimum wage, announced in the Budget, comes into effect in the new year.
“The people who put their hearts and souls into these enterprises tell me that we are going to continue to see closures if the 13.5% VAT rate is continued.
“It is not too late for the government and the Minister for Finance to have a change of policy on this.
And if they continue to ignore these cries for help from people at the very heart of every community, they may face a backlash from their customers and neighbours when it comes to the impending election,” added Deputy Grealish.
