Calls made to immediately cut hospitality VAT rate

The largest representative body for the retail industry in Ireland has called on the Government to follow through on its promise to permanently cut the rate of VAT for the hospitality industry to 9% in Budget 2026.

Retail Excellence Ireland (REI) were reacting to recent media reports which suggested the Government is reconsidering its pledge to cut the VAT rate in Budget 2026 and instead delaying until next summer.

Jean McCabe, CEO of REI, said: “The retail and hospitality industries work hand in glove to provide a world-class consumer experience in Ireland. However, both industries have been severely impacted in recent years by the rising business costs, and numerous business owners have been forced to close their doors after unsustainable financial pressure.

“After a tough few years, the Government’s solemn promise to cut the VAT rate for the hospitality industry was welcome, and it would be regrettable for it to delay its promise now.

“There are too many livelihoods at stake not to introduce a measure as soon as possible that would have such a significant impact on the industry, and on related industries such as retail. Every day counts for the industry.”

Ms McCabe called on the Government to urgently reiterate its promise to cut the VAT rate in Budget 2026: “We are living in a period of deep uncertainty because of volatile geo-political and economic tensions. The least that business owners deserve in Ireland is clear, consistent leadership to safeguard thousands of jobs.

“We must do everything in our power to strengthen our domestic economy at a time when we need it most. As such, the VAT rate for hospitality must be cut in Budget 2026 as promised.”

She reiterated REI’s call that the general rate of VAT be cut from 23% to 21% to assist the retail industry.