Unions have described Government plans to cut the VAT rate for the hospitality sector in the budget as “economic vandalism” after it emerged such a move could severely limit the room for other tax cuts in the budget.
Minister for Finance Paschal Donohoe confirmed on Tuesday that moving ahead with the plan would carry a full-year cost of up to €1 billion from a tax package worth up to €1.5 billion – in turn limiting the scope for income tax cuts or for tax measures aimed at encouraging the supply of new homes.
In a statement on Wednesday, the Irish Congress of Trade Unions said the facts about the hospitality sector do not justify the tax cuts, arguing the sector is now growing, with 11 new companies incorporated for every liquidation – and employment 7 per cent higher than in the first three months of this year than a year earlier.
ICTU general secretary Owen Reidy said that the proposal “flies in the face of all available evidence and would amount to nothing less than economic vandalism”, and Owen spoke to us this morning on The Agenda about this.
We also spoke to Adrian Cummins from the Restaurant Association of Ireland to get his thoughts on this.