Coveney and McGrath at odds over hospitality Vat rate

The enterprise minister has said firms need to be protected from the rising cost of doing business in Ireland

Simon Coveney does not anticipate any tax changes before this year’s budget but the Vat rate for the hospitality sector could be revisited later this year

Tensions are emerging between government departments over the Vat rate for the hospitality sector amid a wave of restaurant closures across the country.

The hospitality Vat rate was hiked back up to 13.5 per cent last September from the pandemic era 9 per cent, however there have been calls for the measure to be revisited in the face of rising costs facing many small businesses.

The Department of Finance under Michael McGrath has no plans to split the Vat rate to help struggling restaurants, however there is a growing acceptance that additional supports may need to be introduced as many restaurants and cafés face closure as a result of recent changes.