One in every five restaurants in Ireland will be at risk of closure if the Government increases the reduced VAT rate back to 13.5% again as planned, the Restaurants Association of Ireland has warned.
The warning came as the organisation published a report it commissioned examining the economic basis for continuing with the current 9% rate.
The analysis finds Ireland would be left at a competitive disadvantage internationally versus other countries with low VAT charges if the rate here were to rise again. It also finds that the energy crisis and other rising costs have squeezed margins in restaurants, putting the business model under much higher pressure.
"The government needs to re-evaluate their plan to raise the VAT Rate for the hospitality sector by 50% as this hike comes in conjunction with various constraints such as the end of the Temporary Business Energy Support Scheme ," said Adrian Cummins, CEO of the Restaurants Association of Ireland.
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