“Tax rises kick in immediately, why shouldn’t reductions?”
The Licensed Vintners Association (LVA) has said that the upcoming reduction in VAT for food should apply from Budget Day later this year. Welcoming the commitment from Minister for Finance Paschal Donohoe TD that the VAT reduction would be introduced in the Budget, the representative body for Dublin pubs said that the rate change should take effect as soon as the Government announces the next Budget.
The Minister has indicated that any such change will not take effect until 1st January 2026.
“It is very welcome news that Minister Donohoe has confirmed there will be a reduction in the VAT rate for food in the Budget to be announced later in the year,” said Donall O’Keeffe, CEO of the LVA. “This comes after a long and hard fought campaign to ensure the Government recognises the challenges facing the hospitality sector. Clearly the industry has been suffering due to cost of business measures imposed by the Government and if they are now taking this step to assist the sector, then the relief provided by this VAT reduction should apply as early as possible.
“There seems very little reason why the Government couldn’t allow the reduced VAT rate to take effect from the day after Budget day. Tax rises kick in immediately, why shouldn’t reductions? All things being equal they should seek to lower it from the Budget Day too.
“While this is obviously positive news for those pubs and hospitality businesses who serve food, it is notable that the rest of the pub trade has also experienced the same difficult, Government imposed business conditions and they will receive no relief under these proposals. That is why we will be pressing the Government to also reduce alcohol excise in the upcoming Budget, which remains amongst the highest levels in Europe,” Mr. O’Keeffe concluded.