VAT cut for food a 'scam', says TD

Ottoline Spearman

A TD has described the VAT rate cut for food hospitality as a scam.

Independent Seamus Healy called on the Government to reverse its decision, saying the state will be subsidising a small number of large and profitable businesses, including McDonald's and Supermac's.

Restaurants and businesses serving food will benefit from a VAT reduction from 13.5 per cent to 9 per cent, as of July next year.

Dubbed the “McBudget” by the Social Democrats, this cut will bolster the operating margins of large multinationals such as McDonald’s.

Tánaiste Simon Harris has said he doesn't accept that it is the wrong decision.

Mr Healy told the Dáil that a small number of fast food chains will get a windfall of €55 million from this budget: "Could I suggest Tánaiste, that your government fell for a fierce lobbying campaign that is effectively a scam.

"There's no crisis in the hospitality industry. Small local cafés and restaurants have a legitimate case for support, but the main industry is thriving."

As reported by the Irish Times, Enterprise Minister Peter Burke thinks the VAT cut for the hospitality sector announced in the budget will salve the troubled souls of the sector’s emboldened lobbyists.

“This argument is finished,” he told reporters on Wednesday.

Meanwhile, the Vintners’ Federation of Ireland has sharply criticised the delay in introducing the reduced VAT rate saying it fails to deliver for the thousands of traditional pubs now fighting for survival and leaves food pubs waiting months for promised support.