The Restaurants Association of Ireland (RAI) has labelled Budget 2024 a ‘missed opportunity’ to secure a sustainable future for Ireland’s restaurants, cafes and gastropubs.
The association noted that the government failed to deliver significant measures to support small and medium-sized food-led and hospitality businesses across the country, adding that business closures will occur as a result of its lack of ‘meaningful action’.
“The hospitality and food-led sector has, time and time again, warned the government that, by increasing the VAT rate for our industry to 13.5%, it will be issuing a death warrant to many businesses that will not be able to withstand yet another cost increase,” said Adrian Cummins, CEO of the RAI.
“The government has today ignored our warnings by failing to return Ireland’s restaurants, pubs and gastropubs to a 9% VAT rate – the right rate for our industry.”
The RAI criticised the government for allowing Ireland to remain at the European Union’s second-highest level VAT rate for hospitality.
It warned that many restaurants, cafes and gastropubs across the country will now be forced ‘over the edge’ and have to close over the coming period.
The association noted that the government should have taken into account various pieces of legislation coming into effect next year, which will place even more costs and pressure on local food-led businesses.
These include an increase in both the minimum wage and paid sick leave entitlements, as well as the planned roll-out of the pension auto-enrolment scheme.
“It was recently reported that Tourism Minister Catherine Martin and Finance Minister Michael McGrath are considering reverting food-led businesses only to a 9% VAT rate in the medium term, but restaurants and cafes across the country cannot wait until then,” warned Cummins.
“The RAI will continue to engage with government ministers and other key departmental stakeholders in the hope that they come to their senses and take immediate measures to support our industry, which has still not recovered from the effects of the Covid-19 pandemic.”
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