The Vintners’ Federation of Ireland (VFI) has welcomed the announcement in Budget 2022 that the Employment Wage Subsidy Scheme (EWSS) is to be extended until April of next year. The VFI says this will give members the opportunity to retain staff during a period when significant consumer uncertainty remains and tourist numbers will be depressed.
The extension of the commercial rates waiver until the end of 2021 is also an important development and will provide time to recoup losses sustained through almost 18 months of closure due to the pandemic.
However, the government’s decision not to extend the 9% hospitality VAT rate past August 2022 is disappointing given the challenges the hospitality trade will face over the coming year and the fact most European countries utilise the 9% rate, which places Ireland at a disadvantage when seeking to attract inbound trade.
While excise duty was not increased in the Budget, the VFI has described the government’s decision not to reduce the tax, which is the second highest in Europe, as a “missed opportunity”.
Speaking after Budget 2022 was unveiled, VFI Chief Executive Padraig Cribben, said: “Budget 2022 recognises that significant challenges remain for the pub sector. By maintaining the EWSS until next April and keeping the commercial rates waiver in place until the end of year the Government is giving publicans a chance to trade out of the most difficult 18 months imaginable.
“We’re just days away from when all indoor restrictions will finally be removed on 22nd October but that is far from the end of the crisis for publicans. Our members remain hugely concerned about consumer confidence and the impact of the forced closure of venues since March 2020. With these Budget measures, Government is effectively giving our members more time to rebuild their businesses.
“The decision to increase the 9% hospitality VAT to 13.5% next September is short-sighted given that tourism will be significantly impacted for years to come. The crisis in hospitality is such that the lower VAT rate needs to be in place until at least 2025.
“While we welcome the fact excise duty is not increased, this was a missed opportunity to lower Europe’s second highest tax on alcohol. Reducing excise duty would incentivise publicans to reinvest in their businesses and increase our competitiveness once tourists do return.
“Overall, the extensions to EWSS and the commercial rates waiver are meaningful supports for the trade as it begins to navigate the post-Covid world,” concluded Mr Cribben.