Return of 9% VAT rate won’t be down to Government parties finding their conscience

Independent TD for Offaly Carol Nolan has said that while she strongly supports calls for Government to deliver on commitments to reintroduce the 9% VAT rate for the food-led hospitality sector from the current rate of 13.5%, any final agreement to do so as part of Budget 2026 “should not be mistaken for Fine Gael and Fianna Fail eventually finding their social and economic conscience.”

Deputy Nolan said that there is a powerful and persuasive case for removing the higher VAT rate, which the Restaurant Association of Ireland (RAI) says has directly led to the closure of 600 small businesses in 2024 alone:

“We all know that the cost of doing business in simply not sustainable and the single greatest contributor to that is the 13.% VAT rate. But what has also made starting and operating a small business is the relentless onslaught regulatory burdens, higher relative compliance costs and administrative demands that strain limited resources. Now that is a process that has been directly overseen by tis and previous governments and they must bear responsibility for that,” said Deputy Nolan.

“It is difficult to watch Fine Gael and Fianna Fail members act as if they are somehow the White Knights riding to the defence of the small business when it was their own parties that laid the ground for skyrocketing energy and operational costs that many of those same small local business have to contend with.”

“The RAI and others are saying that the average restaurant faces €100,000 in extra costs this year vs 2023. But who was in Government in 2023? What parties supported the continuation of policies that have crippled the food led services sector? The same parties we now see acting as the great defenders of businesses they have crushed.”

“While the reduction to 9% VAT rate will be a relief and a lifeline for thousands of workers, let us not pretend that this was Fine Gael or Fianna Fail finding their conscience. It will be down to sustained pressure from businesses, employers and workers who have finally woken Government up to the implications of its own polices,” concluded Deputy Nolan