LVA, VFI and Restaurants Association welcome new measures on VAT and TBESS but say challenges remain
Taoiseach Leo Varadkar briefing media in the Courtyard of Government Buildings, as he announced details of the government’s new cost-of-living plan.
The Licensed Vintners Association (LVA), The Vintners Federation of Ireland (VFI) and the the Restaurants Association of Ireland have all welcomed the cost of living measures affecting the hospitality industry announced by the government yesterday.
The Licensed Vintners Association (LVA) has said that it is “positive that the government has kept the extra tax on consumers off the menu” by pushing back the VAT increase on hospitality until after the summer season.
It also warmly welcomed the extension of The Business Energy Support Scheme (TBESS) and the commitment to simplify the application process.
Speaking in reaction to the government announcement, Donall O’Keeffe, CEO of the LVA said, “We are glad that sense has seen out and that the VAT rate for hospitality will not be changing until after the summer. While we would have preferred to have seen this measure postponed for 2023, it is positive that the Government has kept the extra tax on consumers off the menu for now. In our view it made no sense for the Government to be pushing up prices while there are such cost of living challenges in this country. It would have also been short-sighted to introduce extra taxes just at the beginning of the tourism season. Everyone in the hospitality industry will be breathing a sigh of relief with this news.
“We are also very pleased to see the extension of the TBESS scheme and the commitment to simplifying this process. We know this has been an issue for a lot of pubs and hospitality businesses who have found it challenging to make use of the scheme to date. These were amongst the key points we have been communicating to Government. We hope this will see the benefits of the programme reach those pubs and businesses who need it, following the massive rises in energy prices experienced across the sector over the last 12 months,” Mr. O’Keeffe concluded.
The Vintners Federation of Ireland (VFI) has also welcomed the announcements and says it will help ease the financial burden on its members over the coming months but that once supports are removed pubs will face an uncertain future.
Paul Clancy, VFI chief executive, says: “The Government’s decision to maintain the hospitality VAT rate at 9% for a further six months is welcome news at a time when the cost of doing business is having a severe impact on our members serving food. The Minister for Finance has quite rightly recognised that any increase in the VAT rate would increase inflation at the worst possible time.
“The coming six months are vital for the pub trade, with the St Patrick’s weekend seen as the traditional start of the tourist season and on into summer, so maintaining the 9% VAT rate will assist those businesses serving food and bring an element of confidence.
“However, we are in a situation where the problems an increase in VAT will bring, namely pub closures and job losses, will re-emerge later this year once the extension lapses. Our message to Government will remain the same – the hospitality sector needs VAT at 9% until 2026 when tourist numbers are expected to return to pre-pandemic levels.”
The VFI chief executive also says the expansion of the Temporary Business Energy Support Scheme (TBESS) is welcome.
“Since TBESS was announced during Budget 2023 the VFI has lobbied on behalf of the significant number of our members who were omitted from the scheme because they are not connected to the natural gas network, so the announcement that pubs using LPG and kerosene can now apply is a big boost for businesses facing massive energy costs.
“We recognise that Government is offering considerable support to our sector at this time but the external pressures on our members is unprecedented and will continue for the foreseeable future,” says Paul Clancy.
In addition, Adrian Cummins, CEO of the Restaurants Association of Ireland said investment in the hospitality sector is vital at this point in time.
“These outcomes will provide the necessary support to the restaurant and hospitality sector as they continue to recover from the COVID-19 crisis as well as battling high rates of inflation plus increasing pressures on their margins. The Restaurants Association of Ireland advocates that the government will continue to invest in the hospitality sector so it mitigates against a cliff edge for the hospitality sector in September of this year.”
