The Licensed Vintners Association (LVA), the Vintners Federation of Ireland (VFI) and Drinks Ireland are calling on the government to temporarily reduce the hospitality sector VAT rate and extend it to apply to alcohol sales in pubs and bars until December 31, 2020.
According to VFI chief executive Padraig Cribben, an amended European Commission directive (Directive 2009/47/EC) makes it possible to extend and apply a lower VAT rate to on-trade alcohol in Ireland.
"VAT Matters"
Cribben stated, "VAT relief on alcohol sold for on-trade consumption is an incentive for pubs, as businesses, to reopen. VAT matters to businesses, and this is about giving them a cash injection. Such a measure would generate immediate support, allowing businesses to trade through the reopening period and maintain jobs until trade picks up."
"Tangible Support"
Meanwhile, LVA CEO Donall O'Keeffe commented, "[Pubs] have had to completely change [their] business model, and the VAT model should change to reflect our new reality. Government guidelines mean we will operate at 50% capacity or less, yet our VAT burden currently remains the same. This is inequitable and should change, similar to measures taken on VAT in other EU countries.
"Our VAT rate on alcohol is significantly higher than EU averages. It is our strong view that a temporary reduction and extension of the hospitality VAT rate to alcohol sales in the on-trade, until 31 December 2020 should be implemented. This will provide tangible support and show solidarity with this industry. This is about businesses surviving."
"Critical"
Drinks Ireland director Patricia Callan added, "It is critical that the government provides targeted financial supports for hospitality businesses to assist them in reopening. Our new taoiseach has vowed to reboot the economy with 'urgency and ambition'. The drinks and hospitality industry is one which requires urgent support and ambitious policy. A reduction and extension of the hospitality VAT rate to on-trade alcohol sales would tangibly deliver for the industry."
© 2020 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.
