'This is the last straw' - Cork businesses hit out at increased fuel costs and VAT rate
Speaking to The Echo about the VAT increase, Jeff Hamidi of Koto Restaurant in Cork city called on the Government to reconsider its decision in Budget 2024, due to be announced in October, calling for “meaningful and real commitment”.
CORK businesses have highlighted major cost concerns amid an increase in both the VAT rate and the costs of fuel.
In recent days, the 9% VAT rate, which was originally introduced as an intervention during Covid-19, was increased to 13.5%. Meanwhile, petrol excise rates increased by 7c per litre, diesel prices rose by 5c and gricultural diesel also increased by 1c in the second of three increases in excise aimed at unwinding a reduction introduced in March last year.
Speaking to The Echo about the VAT increase, Jeff Hamidi of Koto Restaurant in Cork city called on the Government to reconsider its decision in Budget 2024, due to be announced in October, calling for “meaningful and real commitment”.
“Give us meaningful and real commitment for a VAT rate to stay at 9%," he said. "The last thing we want to do is raise our prices but we have no choice.
“Nobody likes his VAT increase, not us in the hospitality nor our guests, nor our tourists - but the government will,” Mr Hamidi added.
“It’s disappointing to see such a large increase - 9% to 13.5%. Many of the businesses affected are where you get your coffee from in the morning, where you get your haircut, and where you enjoy a nice meal out with friends and family - small, family-run and owner-operated businesses in the community.
“We have the second highest VAT rate in this sector compared to our neighbours in Europe. I hope that the Government will reevaluate this decision in the upcoming Budget, with a permanent and meaningful decision to keep VAT at 9% for food operators,” he concluded.
Joseph Byrne who is the owner of Joseph’s Hair Salon in Glasheen described the increase in VAT as "crazy".
"They [the Government] should have kept it at the 9% rate for the next 12 months," he said. "We have just come out of Covid. We are in a cost-of-living crisis. Our electricity bills and all our products have gone up. This is the last straw.
“I will have to put up my prices even though I don’t want to,” he added. “My staff are looking for extra wages because they have extra expenses as well such as increased mortgages, energy, and grocery bills.
"I am fearful that some people will stop coming and I don’t want that either. The customers coming in are fearful over the rising costs in this country. It is a horrible situation."
Speaking to The Echo about the increase in fuel costs, Paul Lynch, a member of the Cork Taxi Council, said:
"The Government are out of touch, and they don’t care. The Government could have postponed or stopped this increase in fuel. It just shows how out of touch with the public they really are. Everyone is suffering and feeling the pinch," he added.
"I dropped an elderly couple home and they told me they are already fearful of their bills over the coming months which is very sad.
“Taxi drivers have the meter so we can’t put the increase in fuel on to customers," Mr Lynch stated further. "We will have to suck it up. It is the same as the insurance which fluctuates every year. We just have to get on with it."
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