Fine Gael VAT hike proposal is a kick in the teeth for small businesses

Independent TD Carol Nolan has strongly criticised proposals by Fine Gael to reduce the VAT rate for the hospitality sector to 11% from the current rate of 13.5% as ‘a recipe for division that fully exposes the Party’s reputation for financial responsibility as a sham.’

Fine Gael has generated significant backlash on the measure from all political party’s including its former Government partner, Fianna Fail, with many suggesting that the move if implemented would hit every business and household in the country with additional energy costs:

“Not 48 hours into the election campaign and Fine Gael and Fianna Fail are at each others throats over a proposal that I have been calling for over the last year; the reduction of the 13.5% VAT rate to 9% across the board to rescue sinking businesses,” said Deputy Nolan.

“Indeed, Fine Gael’s proposal is like throwing small businesses a life line and a cement block at the same time. It only helps some while punishing others through a likely increase in energy costs.”

“Budget 2025 was the time for the VAT rate reduction, but Government chose to dismiss it. That was incomprehensible to me as Government was actively aware of the reality that the number of restaurants, cafés and other food-led businesses forced to close their doors for good since the 50% hike in the hospitality sector’s VAT rate from 9 to 13.5% last September has already reached a total of at least 577.”

“What we are seeing now is that there is no ‘plan’ to assist struggling businesses in Offaly in terms of VAT rate reductions. There is only off the top of the head proposals that would moderately assist some small businesses while driving costs up for others,” concluded Deputy Nolan.