An Oughterard family business could have been saved from closure by a reduction in the rate of VAT charged to food and hospitality businesses, Galway West TD Noel Grealish told the Dáil last week.
Speaking during a debate on the Finance Bill, he urged the Government to accept an amendment for the restoration of the 9% VAT rate for this sector, tabled by the Regional Group of which he is a member.
The Independent TD said that tourism was a vital contributor to the economy of Ireland, particularly the west and Galway. It also contributed to the survival of some communities in areas where there was little or no other employment and which in the past had been ravaged by emigration.
“We need to support the local café in the small village," he said. "I was sorry to see Conneely's café shop in Oughterard, County Galway, close last Sunday. It is a small family-run café shop employing eight or nine people.
“When the VAT rate went up, it just could not survive and unfortunately had to close. It was a little family-run business, and it was a sad day for the family and the people of Oughterard.
“That is what is happening around the country with the VAT rate. That reduction in the VAT would have been a life-saver for them.
“If we do not support the local café in the small village in the west and it is forced to close its doors, the tourists who now stop there may not stop there but go on to the next town.
“The village then begins to lose the source of income that helps the local craft shop, grocery shop and other small enterprises to keep their heads above water. That was obvious outside yesterday when we had the café, restaurant and bar people from around the country.”
Deputy Grealish said the gathering of people from the hospitality and tourism sector outside Leinster House last week was not a protest, rather an attempt to get the message across to TDs that they were in serious difficulties.
“A lot of them cannot even open during the day due to the shortage of staff, which means their income is down. It means they then have more VAT to pay on the remainder of the business they do.
“There is also the increase in the minimum wage. I know people have to get paid, but that puts huge pressure on them. We will see more businesses close over the winter. Supports should be brought in.”
He added: “This is about survival. The difference between the VAT rate of 13.5% and 9% will make the difference between keeping the doors open and the collapse of many of the businesses we are talking about.
“We have already lost more than 600 businesses like restaurants, cafés and other food-related ventures since the VAT rate went back up. Our colleagues in the Regional Group have tabled amendments to the Finance Bill, one of which is to reduce the VAT rate from 13.5% to 9%.
“If that is not accepted by the Government, I will not be supporting the Finance Bill.” Deputy Grealish warned.
