Enterprise Minister, Peter Burke, has dismissed allegations of failing the hospitality industry due to his inability to secure a reduction in the VAT rate in the recent budget announcement. While he advocated strongly for businesses at the Cabinet table, his last-minute push for a decrease was unsuccessful.
The decision not to lower the 13.5% VAT to the temporary 9% rate in the recent budget, as was done during Covid, has left hospitality businesses and their representatives expressing deep dissatisfaction. This comes after a heavily publicised campaign to persuade the Government to accept this policy.
Addressing journalists at a Wednesday press briefing in Government buildings, Mr Burke rejected the notion that he has let down the hospitality industry. He outlined the considerable efforts made to support the sector, highlighting the announcement of a €167 million energy subsidy scheme for hospitality and retail outlets.
The Fine Gael TD highlighted his in-depth examination of upcoming regulatory changes and their potential cost to businesses. In response to these cost pressures, he asserted the decision to delay the pension auto-enrolment until September 2025.
Mr Burke did not dispute his advocacy for both a reduction in VAT for food-oriented businesses and a decrease in alcohol excise duty. This was in agreement with the Restaurants Association of Ireland and the vintners lobby’s demands, yet these measures were not included in the budget.
In clarifying the discrepancy between his view of the hospitality sector’s needs and the Department of Finance’s budget agreement, he stated that a business minister’s advocacy for business was unsurprising and, in fact, commendable. He was also questioned on the economic rationality of the costly VAT cut, which has widely been doubted.
Mr Burke defended this policy by explaining how he had heard firsthand from numerous hospitality businesses about their need for support to maintain their business model and viability. However, he maintains optimism that the 2025 budget will reduce utility costs for the hospitality sector, providing a significant financial boost.
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