Further closures, jobs losses if VAT not reduced for food-led hospitality – RAI
The Restaurants Association of Ireland is warning of further closures and job losses if the VAT rate for food-led hospitality businesses is not reduced.
The RAI said it is “essential” that the Government reinstates the 9% VAT rate, which is currently at 13.5%.
The Government has pledged to reduce the rate.
In its pre-budget submission, which is being launched today, the Restaurants Association of Ireland said the coalition “must fulfil its promise to reinstate the 9% VAT rate for food-led hospitality businesses or face the consequences of further closures, job losses and long-term damage to Ireland’s tourism economy, particularly in rural towns and villages”.
The RAI said such a move is “needed to safeguard” thousands of restaurants, cafés and gastropubs across the country, as it said over 200 restaurants have already closed in 2025.
It said the current 13.5% VAT rate in Ireland is “one of the highest VAT rates on food services in the EU”.
“The estimated €545 million cost of restoring the 9% VAT rate should be viewed as an investment, not a loss.”
The CEO of the Restaurants Association of Ireland is calling for Budget 2026 to be “a turning point”.
Adrian Cummins said temporary measures are not enough.
“We need a pro-SME, pro-hospitality budget that supports survival now and enables long-term growth,” he said.
“Bringing back the 9% VAT rate, as promised by Government, is essential. Tánaiste Simon Harris called it a solemn commitment, now it’s time to deliver,” Mr Cummins added.
The RAI is also calling on the Government to align future increases to the National Minimum Wage with inflation.
It is also seeking a halving of the employer PRSI rate for one year “to relieve cost pressures” and urgent insurance reform to address what it describes as “unaffordable liability premiums”.
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