The Irish Congress of Trade Unions (ICTU) has urged the Government to drop proposals for a €1bn cut in the VAT rate for the hospitality sector, calling it “economic vandalism”.
Following the publication of the Summer Economic Statement yesterday, Minister for Finance Paschal Donohoe said that the cost of the VAT cut would be almost €1bn, using the majority of the €1.5bn identified for tax measures.
“The proposal to cut the VAT rate at a time of huge economic uncertainty flies in the face of all available evidence, and would amount to nothing less than economic vandalism,” said General Secretary of ICTU Owen Reidy.
“Hospitality is a sector rife with low paid employment and poor conditions, and all evidence suggests that the reduction in VAT will not be passed on to consumers or staff, but pocketed by employers,” Mr Reidy said.
SIPTU said private sector workers have been short-changed by a Government which has broken commitments on pensions, increased sick days and measures to offset the cost of living crisis while announcing tax breaks for business.
“This morning on national radio, the Taoiseach, Micheál Martin, stated that there was a prior commitment to the hospitality sector on a VAT reduction,” said SIPTU Deputy General Secretary Greg Ennis.
“However, what about the Government’s prior commitments to workers with regard to increasing statutory occupational sick pay from five to seven days in 2025, progression towards a living wage in 2026, which has now been shelved until at least 2029, and the abolition of sub-minimum wages for young workers,” Mr Ennis said.
