BUDGET 2026: Cork hotelier welcomes reduced VAT rate

“The 9% VAT rate is a crucial measure that will go a long way toward assisting struggling food service businesses the length and breadth of the country.”

Those were the words of Cork hotelier and Irish Hotels Federation (IHF) President Michael Magner following the announcement by the Government of a reduction in VAT for food services as part of Budget 2026.

The Proprietor of Vienna Woods Hotel said: “This measure goes a long way toward putting Irish tourism on a more stable footing, aligning Ireland’s VAT rate for hospitality food services with the majority of our European competitors. This is essential given the significant social and economic contribution our industry makes, supporting over 270,000 livelihoods. More than 70% of these roles are outside Dublin, making our industry a key driver of regional employment, economic diversification and rural development.”

He added: “Given the ongoing challenges facing our sector, including serious cost-competitiveness issues, we are calling for this reduction to be made permanent in order to provide greater long-term certainty to those businesses that are heavily reliant on food services.”

Mr Magner also welcomed the additional allocations in Budget 2026 for Fáilte Ireland and Tourism Ireland.