Fianna Fáil MEP Billy Kelleher has said that the announcement by Finance Minister, Michael McGrath TD that he will consider revising Ireland’s VAT rates to support food-led businesses is very welcome and desperately needed.
Kelleher, a member of the European Parliament’s Economic and Monetary Affairs (ECON) and Taxation (FISC) committees, which deal with the overall VAT policy at European level, added, “over the past number of weeks and months, food-led businesses have made it incredibly clear to me that they are struggling with the increase from 9% to 13.5%.
“They really fear for their viability - the increase from 9 to 13.5% in terms of VAT, allied to the cost of implementing the increase in the National Minimum Wage, is making many small food-led businesses simply unviable.
“In my opinion, the Government should look at separating out how food-led businesses and accommodation providers are treated in terms of VAT rates. They are operating in very different environments, with very different cost bases.
“In recent weeks, we have seen a spate of food-led businesses closing due to their costs rising exponentially. Increasing VAT on these businesses has resulted in many of them closing their doors.
“Our regional towns and villages that rely heavily on tourism income are under fierce pressure. The Government needs to address this issue as part of Budget 2025.
“Minister McGrath has always been a very strong supporter of Irish SMEs, and I am hopeful that something can be done for our food-led SMEs when the budget is negotiated and voted on later this year,” concluded Kelleher.
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