Ross under fire as hotels and haircuts are hit by Vat hike
TOURISM Minister Shane Ross faced calls to resign as the Government announced plans to increase Vat on hotels, B&Bs and restaurants.
Hospitality industry chiefs warned that some 5,000 jobs would be lost as a result of the tax being hiked from the emergency rate of 9pc, up to 13.5pc.
“This Vat increase has just cost 5,000 jobs in our businesses – restaurants, cafés and bars serving food,” said Restaurant Association of Ireland chief executive officer Adrian Cummins.
“Minister Ross failed to defend us in the negotiations in the Budget. If Vat increased from 9.5pc to 11pc, then we might have given the minister a pass mark. But we give him zero per cent for complete failure and he should now resign.”
The new higher Vat rate is combined with the minimum wage going up from €9.55 to €9.80, so his 3,000 members
will be hit on the double on the same days, he added.
“This is a black day for us. In one fell swoop, we have these increases and the arrival of Brexit in March,” he told the Irish Independent.
The hike will also affect the hairdressing industry, as it falls into the hospitality category.
Karen Murtagh, who owns K-Styles in Balrothery, Co Dublin, and employs three staff, said it would inevitably affect the price of a haircut.
“It’s a bit mad obviously, I wasn’t expecting this high an increase as it is already high enough, and we pay an additional Vat on hairdressing products,” she said.
“Bigger salons won’t be as affected, but smaller businesses will be forced to put people out of jobs or take a step back from hiring.
“You can’t compare Dublin city centre and a little village salon. Where I am, it’s a little salon, a pub, a shop. That’s it.”
Leading Dublin hairdresser David Marshall warned: “This is counter-productive in a business that is all about people and offering employment.”
Brian McDermott, who opened Moville’s Foyle Hotel in Co Donegal just months ago and has already won Newcomer of the Year 2019, also said job losses were inevitable.
“This is a roller coaster for jobs and positions, and it is unacceptable,” he said.
Pat McCann, the chief executive of Ireland’s largest hotel group, Dalata, said the reduced Vat rate introduced in 2011 had a “positive effect on the entire economy”.
He said he was now “a bit peeved” the tourism sector had spent years growing employment but that the special rate would now be axed.
Michael Lennon, president of the Irish Hotels Federation, also slammed the increase.
“This increase will hurt tourism across the country but businesses outside of Dublin will be hit the hardest,” he said.
“Regional businesses will bear the brunt, as about €300m of the €466m in additional taxes will be taken from the rural economy, which has been slower to recover.”
He added: “This is a devastating blow for the many tourism businesses that struggle to break even or stay open outside the peak season.”
Independent TD for Kerry Michael Healy-Rae was quick to criticise the plans, saying he was “disgusted and angry”, calling it a “slap in the face” to small and rural operators.