Budget 2027
Dail Éireann — 2026-05-20
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Jennifer Murnane O'Connor (FF), Carlow-Kilkenny

I thank the Deputy for raising this important issue and highlighting the role that pubs play in Irish life and culture by providing a central hub and meeting place in towns and villages across the country. The Government’s commitment to the sector was most recently demonstrated by the reduction in the VAT rate to 9%, recognising that the sector is highly labour-intensive. It forms a key part of the domestic economy and is expected to support over 150,000 jobs across the country. We can help to keep the doors open and the jobs going by providing clarity and certainty for these hospitality businesses.
I assure the Deputy that while the Department of Finance receives pre-budget submissions from a wide range of stakeholders in advance of each budget, all are given consideration as part of the annual policy cycle. I am aware that the Department has received and acknowledged a submission from the VFI outlining a proposal for a payable tax credit for pubs. The proposed payable credit would be linked to the number of draught product kegs purchased by a business, and it would be subject to a per-premises cap of €20,000.
Proposals for new tax expenditures are examined by reference to the Department’s tax expenditure guidelines, which outline the Government’s approach to how tax expenditures are best used, noting that these narrow the tax base and how they should be evaluated. A number of issues at a European level will need to be taken into account during these deliberations, including state aid requirements. Measures that confer a selective advantage on a specific sector have the potential to constitute state aid and, therefore, could not be introduced unless compliant with an existing framework or by undertaking a full notification process.
It should be noted that the tax credits available for film and digital games are all approved state aids, largely under the terms set out in the EU’s Communication from the Commission on State aid for films and other audiovisual works, which would not have relevance to the on-trade sector. This is what the Minister for Finance has highlighted. Additionally, any tax credit given to rural pubs, or, indeed, to all pubs, and which is based on the supplies of alcohol products to those pubs, would have to be considered in the context of the alcohol structures directive if its effect, in practice, were to give relief from the rate of alcohol excise paid on alcohol products. This directive lays down a harmonised approach to excise duties on alcohol in the EU. It defines alcoholic beverages and sets out the basis on which excise duties on such products are to be established by member states, as well as the conditions for the application of reduced rates and special regimes. These are the issues Ministers are looking at.
It is worth noting that there has been no general increase in excise duty rates for alcohol since 2014. While the retail price of beer has risen over that period, the excise duty has remained unchanged and, therefore, the total tax as a percentage of the retail price of each pint is lower than it was more than a decade ago.
I assure the Deputy that the Government is conscious of the challenges facing all businesses in the current economic climate. The Cost of Business Advisory Forum is working to look at the structural issues that are driving up costs and the steps that could be taken to mitigate them. It is important to note that we understand the overheads and the way costs have risen for businesses.
It is also important to highlight that a number of existing tax supports are available to all business, including the on-trade environment, to encourage investment in the economy, particularly in indigenous SMEs. These supports include the employment investment incentive, the start-up relief for entrepreneurs and the start-up capital investment. A range of direct expenditure supports are available to business and details can be found online at the national enterprise hub. Notwithstanding what I have said, the matters raised in the Deputy's submission will continue to inform ongoing policy consideration in the context of the budget. It is with the Minister.

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Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/dail/2026-05-20/debate/main
Retrieved: 2026-09-28T05:50:47+00:00
Sitting date: 2026-05-20