Donohue snubs council’s invite to discuss VAT

THE Minister for Finance Paschal Donohue has turned down an invitation from members of Kerry County Council to discuss the decision to end the special nine per cent VAT rate for hospitality business.

The decision to revoke the special rate and immediately hike hospitality VAT bills back to the 13.5 per cent level has hit businesses in Kerry especially hard given the local economy’s heavy reliance on tourism.

Recently members of Kerry County Council’s South and West Municipal District coucnil – which covers the county’s primary tourist destinations – invited Minister Donohue to meet them and duiscss the potential impact of the decision to hike the VAT rate.

In a brief reply the Ministers Secretary contacted the management at the Municipal District with a blunt reply stating that the Minister isn’t in a position to meet the councillors at this time.

The VAT hike has been heavily criticised by senior figures in the hospitality sector

Restaurant Association of Ireland(RAI) Chief Executive Adrian cummins has said that raising the VAT rate to 13.5% has undermined the competitiveness and viability of Irish businesses.

“It also has the potential to put up to 27,000 jobs at risk, according to an analysis by economist Jim Power. Along with the other rising costs of doing business, such as increasing insurance costs and the raise in the minimum wage, many businesses are struggling to stay open,” he said.

Given the uncertainty around Brexit and the potential for long-term and far-reaching consequences for the Tourism and Hospitality sector, the Government needs to bring the VAT rate back to nine per cent to help ensure the viability of the sector post Brexit,” Mr Cummins said.

When the hike was announced in last October’s budget the then Chair of the Kerry branch of Irish Hotels Federation Niamh O’Shea, warned that the VAT hike would seriously harm rural businesses.

“Have no doubt, this increase will hurt tourism across the country but rural businesses will be hit the hardest. Regional businesses will bear the brunt.”