Cork businesses’ fear at ‘concerning’ delay in restoring 9% Vat rate

Reports that the reintroduction of the 9% Vat rate for the food sector may be delayed are “deeply concerning”, the Cork Business Association has said.

A €867.7m figure being cited as the cost to the Exchequer of reducing the 13.5% Vat rate covers a wide array of businesses, but it is food businesses that need the most support — a cost closer to €560m — it said.

CBA president Dave O’Brien said cafes, bars, and restaurants in particular “are already under enormous pressure”.

“Rising input costs, staff shortages, upcoming commercial rates hikes, and ongoing rate reviews are hitting these small businesses hard — many of which are the backbone of our towns and cities,” he said.

“The country is still seeing between 30 to 40 restaurant closures every month. Without immediate support, more will follow.”

Accelerate

According to Seán McCarthy, owner of Tequila Jack’s and Paddy The Farmers in Cork city, a delay in reducing Vat would only accelerate this trend.

“The non-reduction of the Vat rate for pubs serving food will be another nail in the coffin for people in the hospitality industry,” he said. “On average, 114 pubs are closing nationwide year on year and the numbers of pubs left open have dropped by 24% since 2005. We urge the Government to reconsider their current position on the Vat issue.”

Mr O’Brien said that Government support for these businesses is needed to offset losses from elsewhere.

“Our tourism sector depends on a vibrant and thriving hospitality offering — it’s part of what makes Ireland so attractive to international visitors,” he said.

“However, due to global economic trends and current monetary policy in the US, we are already seeing a slowdown in American tourists — a key market for Ireland. Tourism relies heavily on hospitality and these businesses need to survive to ensure Ireland remains attractive in enticing tourists here.”

Act now

The CBA is urging the Government to act now. “The time to support our SMEs is not later this year, it is now. A targeted Vat reduction for the food sector would help preserve jobs, sustain local economies, and ensure our cities and towns remain welcoming and alive with hospitality,” it said.

Ger Kiely of the Old Oak, one of the city’s largest pub and music venues, added: “The Government needs to look closely at the entire hospitality sector, from pubs to restaurants, cafes, and live music venues, while there is still something left to preserve and nurture. It’s not just the tax burden — it’s all the other costs and regulatory imposition on small businesses.”