A FINE GAEL TD has said the proposed 9 per cent VAT rate for the hospitality sector is vital to helping small businesses survive and grow amid a challenging economic climate.
Speaking on Sunday, John Clendennen described small businesses as 'the backbone of the Irish economy' as he reiterated his support for the reduced rate for food and catering services.
Minister for Finance Paschal Donohoe revealed in February that he hoped to announce the 9 per cent rate on budget day for the food and catering sector, where he believes it can have the biggest impact.
However, he said the overall cost of such a move would be €675m per year. The government previously cut the rate to 9 per cent between November 2020 and August 2023 at a cost of more than €1.3bn.
Deputy Clendennen, who is also president of the Vintners' Federation of Ireland, said the proposed VAT rate 'would make a huge difference' to the hospitality sector.
"Having worked in the hospitality sector I know how important it is to support our small and medium businesses in our towns, villages, and cities," he said.
"Small businesses are the backbone of the Irish economy. They are at the heart of every community, fuelling our local economies, and providing good quality, stable jobs.
'Struggling to keep afloat'
"Fine Gael has been unwavering in its support for Irish businesses. My colleagues Minister Peter Burke and Minister Paschal Donohoe want to ensure we help the hospitality sector deal with the ever-increasing costs of doing business and the ever-diminishing margins.
"Minister Burke is bringing forward a Competitiveness Action Plan with the Tánaiste Simon Harris before Summer, which will contain measures to support our SME sector.
"The government has done a lot to support businesses, but we need to do more and having the 9 per cent VAT rate would make a huge difference for the hospitality sector.
"Businesses across the country are facing challenges, that's why we decided to pause the increase of statutory sick days from five to seven and delayed the introduction of a living wage until 2029.
"We can't ignore that there are cafes, restaurants, and other hospitality businesses across Ireland that are struggling to keep afloat.
"Fine Gael has always backed business, especially our small and medium-sized enterprises and we want to see them thrive with a 9 per cent VAT rate."
See More: Budget, John Clendennen, Paschal Donohoe
