Hospitality Vat hike will see diners’ bills rise

A HIKE in the tax on eating out which kicks in today will see diners’ bills go up by more than €2 as restaurants struggle to absorb the extra tax.

The minimum wage will also rise by 25 cent per hour from today to €9.80, with the Restaurants Association of Ireland warning the hike in costs will result in job losses and closures of businesses.

The increase in Vat on meals from 9% to 13.5% starts today as the Government reverses the cut made during the recession to help the hospitality industry.

Many small restaurants say they can’t afford to absorb the extra tax so it could mean a couple enjoying a €50 meal together will see the bill go up by €2.25. The tax was lowered to 9% almost eight years ago to help the hospitality industry during the recession.

But having achieved this, the Government decided to restore the rate to 13.5% during Budget 2019.

The Restaurants Association of Ireland is

angry the Department of Finance did not increase the tax to 11% but restored it to the full 13.5%. And it warned about an electoral backlash in the European and local elections later this year if the hike closes restaurants and costs jobs.

The association’s Adrian Cummins said: ‘We can’t tell businesses what to do but what we’re hearing is the vast majority are going to pass it onto consumers so it’ll mean menu price increases.

‘So a meal for two that costs €50 will go up €2-odd; you would notice it and you’d

notice it if you’re a business when you’re paying the taxman your first quarterly Vat bill, it’ll be 50% more.’

He said that Brexit is just three months away and the uncertainty it is causing is unsettling business, especially in the border region.

‘They [the Government] have their heads in the sand and think everything’s going to be fine for the industry and that’s not the case. The drink-driving laws are after killing businesses down the country, it’s devastating businesses.’