MEP Seán Kelly has called on his Fine Gael colleagues in government to support the reinstatement of the nine per cent VAT rate for the hospitality sector.
His said his appeal comes in response to the ongoing financial strain faced by restaurants, cafes and retailers due to rising operational costs.
“Reinstating the nine per cent VAT rate is crucial for many small businesses in our hospitality sector.
“The increase has placed an additional strain on these businesses, many of which are already struggling to cope with higher wages, energy bills and other escalating costs,” the Killarney based Ireland South MEP said.
The Government had reduced the VAT rate in 2020 to support the hospitality sector during the pandemic but it reverted to 13.5% last August.
He said the temporary relief provided a lifeline to countless businesses and a return to the nine per cent rate to prevent further closures and job losses.
Mr Kelly argues that the benefits outweigh the costs of a return to the lower VAT rate.
“Investing in the sustainability of our small businesses is essential. The long-term repercussions of continued closures would be far more damaging to our economy,” he told KillarneyToday.com.
“By alleviating the pressure on businesses, we can avoid passing on costs to consumers, thereby protecting disposable income and maintaining competitiveness,” Mr Kelly said.
Also expressing concern, Kerry Fianna Fail councillor, Michael Cahill, has urged support for the hospitality sector during what he described as “a very difficult summer season for many”.
“Looking to recover from the twin blows of Brexit and Covid-19, hospitality focused businesses are this year faced with reduced numbers visiting Kerry.
“The hospitality sector VAT rate must revert to nine per cent, the proposed increase in commercial rates must be postponed indefinitely and financial help must be provided for those struggling with exorbitant rates, insurance and electricity costs,” said Cllr Cahill.
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