The Irish Congress of Trade Unions (ICTU) has called for the abolition of the 9% VAT rate enjoyed by the hospitality and tourism sector, citing that the tax break "has done nothing for workers in the sector, which is still characterised by low pay and precarious work."
Industry bodies such as the Restaurants Association of Ireland have called for the 9% VAT rate to be maintained ahead of the upcoming Budget 2017, however ICTU General Secretary Patricia King has stated that government should abolish the tax rate, 'as key elements of the sector were enjoying strong profits while wages and working conditions remained poor'.
"This tax break was introduced in 2011 and we were told that it would cost some €350 million and that benefits would be passed on to consumers and workers," said King. "In fact, it has cost the taxpayer more than €2.1 billion to date, with an annual cost of €620 million.
"There is no evidence of any benefits have been passed on to consumers or workers, but there is clear evidence that employers and businesses have seen their profits increase in the intervening years.
"In addition, the key employers in the sector are refusing to engage with a state-organised forum – the Joint Labour Committee - that was set up to negotiate pay and conditions for their staff.
"They are happy to benefit from taxpayer largesse, but continue to boycott a forum established by the state, that is designed to tackle the widespread problem of low pay in the sector," she said.
"It is wrong that working people should continue to subsidise employers who treat official bodies with such obvious contempt," added King.
She also said the tax break was "badly targeted and a grossly inefficient use of taxpayers’ money, as many of the beneficiaries, particularly in Hotels and Catering, are major multinational corporations."
