Tax Reliefs
Dail Éireann — 2026-06-25
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Simon Harris (FG), Wicklow

As the Deputy will be aware, the 9% VAT rate will be reintroduced for hairdressing services and for restaurant and catering services in the food-related hospitality sector from 1 July 2026. We have different views on this. I am very pleased that this is happening. The decision reflects the Government's commitment to supporting employment in sectors that are highly labour-intensive and form a key part of the domestic economy.
I am aware the Deputy and I have different views on it. In my view, it reflects a need that has been recognised in the programme for Government to support SMEs, especially those in the retail, tourism and hospitality sectors. The programme for Government notes the increased cost pressures on these sectors and states that the Government will bring forward measures that will entail changes to VAT.
The vast majority of businesses within this sector are small businesses. They are spread across the whole State. All of these businesses employ people whose jobs I and the Government are trying to protect and sustain in the time ahead and the most important thing at the moment in the global environment we live in is to protect and retain those jobs. The available Central Statistics Office, CSO, data for the food and catering and accommodation sectors indicate that over 99% are SMEs with over half of those businesses being microenterprises with less than ten employees.
The estimated full year cost for 2027 of the 9% VAT rate being applied to food and catering services is €633 million. The estimated cost of the hairdressing element is a further €48 million. The total full-year cost, to answer Deputy Nash's question, is estimated to be €681 million.
In making any decision in relation to VAT rates or other taxation measures, the Government must balance the costs of the measures against their impact. As outlined in last year's budget, the objective of the measure is to try to support businesses in services sectors, such as hospitality, who are facing increased cost pressures - they are even more increased now than at the time of the last budget. This measure is expected to support them and over 150,000 jobs they support and sustain across the country.

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Retrieved: 2026-08-27T06:54:51+00:00
Sitting date: 2026-06-25