ICTU calls for end to RoI hospitality VAT rate
The Irish Congress of Trade Unions (ICTU) has called for the abolition of the Republic’s preferential nine per cent VAT rate for businesses in the hospitality and tourism, claiming that “the tax break has done nothing for workers in the sector, which is still characterised by low pay and precarious work”.
The RoI’s hospitality VAT rate has long been the envy of businesses in Northern Ireland, who maintain that the government’s refusal to reduce the 20 per cent rate which they pay puts them at an unfair disadvantage.
The ICTU’s general secretary, Patricia King, said recently that the Irish government should abolish the tax break in Budget 2017, as key elements of the sector were enjoying strong profits while wages and working conditions remained poor.
“This tax break was introduced in 2011 and we were told that it would cost some €350 million and that benefits would be passed on to consumers and workers,” she added. “In fact, it has cost the taxpayer more than €2.1 billion to date, with an annual cost of €620 million.
“There is no evidence of any benefits have been passed on to consumers or workers, but there is clear evidence that employers and businesses have seen their profits increase in the intervening years.
“In addition, the key employers in the sector are refusing to engage with a state-organised forum – the Joint Labour Committee – that was set up to negotiate pay and conditions for their staff.”
Ms King said that employers in the sector were happy to benefit from the largesse of the taxpayer which continuing to boycott a forum established by the state and designed to tackle the widespread problem of low wages in the hospitality sector.
“It is wrong that working people should continue to subsidise employers who treat official bodies with such obvious contempt,” she added.
Ms King also said the tax break was “badly targeted and a grossly inefficient use of taxpayers’ money, as many of the beneficiaries, particularly in hotels and catering, are major multinational corporations”.
