The Licensed Vintners Association (LVA) has said they plan to make the restoration of VAT 9% for food an election issue in the run up to the Local and European Elections this summer. They will begin writing to all public representatives for Dublin on this issue this week, seeking their commitment for restoring the lower rate of VAT for food and highlighting how the Government measure has been damaging to hospitality.
Taoiseach Leo Varadkar TD recently said a reduction in VAT for food “warrants consideration”, while several prominent politicians have already expressed their support for the reintroduction of the 9% rate for food, including Minister of State Neale Richmond TD. There will also be a motion in Dáil Éireann this coming week on the issue.
The 9% VAT rate for food had been in place for 10 of the last 12 years, before it was scrapped by Government last September. For the average Dublin pub, 35% of their turnover comes from food. That figure rises to 50% of turnover for a significant number of food focused pubs across the capital.
The LVA expressed that since the Government increased the VAT rate on food last autumn, food businesses were forced to raise their menu prices. Pubs across Dublin have highlighted how damaging this has been, with customers also expressing their distaste for the measure.
The vintners plan to write to politicians across the capital asking them whether they support the reinstatement of VAT 9% specifically for food, and they will be asking their members to do the same to their local public representatives.
Donall O’Keeffe, chief executive officer, LVA, said: “The simple fact of the matter is that the Government should never have increased the VAT rate for food last year.. It immediately pushed the level of taxation applied to food up by 50% and that had an instant knock on impact on menu prices.
“The Government are now seeing the impact of that decision. There are hospitality businesses having to shut their doors for good on a near daily basis. Raising the VAT rate on food and then quickly following that up with the imposition of other mandatory costs for small, low margin businesses such as the increased minimum wage, the increased sick leave entitlements, the extra employers’ PRSI and the pension auto-enrolment is making the trading environment extremely challenging and the Government needs to recognise that fact.”