Dáil vote · 16 October 2024

VAT Rate for Hospitality Sector: Motion (Resumed) [Private Members]

Question put: "That the motion, as amended, be agreed to"

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What this vote means

Policy motion

A policy motion expresses the House's position or calls for action. It does not itself change the law or legally require the Government to carry out the policy requested.

Tá means yes and Níl means no to the exact question put. The vote alone does not establish a TD's full position or reasons.

DáilDex interpretation of the official wording.

Oireachtas definitions

The result

Carried

Tá (yes): 73
Níl (no): 52
Staon (abstain): 0

Tellers: Tá, Deputies Hildegarde Naughton and Cormac Devlin; Níl, Deputies Michael Fitzmaurice and Thomas Pringle.

Official record Read the debate

How each party voted

Party	Tá	Níl	Staon	No vote	Most voted
Fianna Fáil	30	1	–	–	Tá
Fine Gael	29	–	–	–	Tá
Sinn Féin	–	25	–	–	Níl
Green Party	11	–	–	–	Tá
Independent	–	9	–	2	No whip
Labour Party	–	4	–	–	Níl
Independent Ireland	–	3	–	–	Níl
Independents 4 Change	–	3	–	–

How every TD voted

Showing 122 of 122 TDs

Aengus Ó SnodaighSinn Féin · Dublin South-Central
Níl
Aindrias MoynihanFianna Fáil · Cork North-West
Tá
Alan DillonFine Gael · Mayo
Tá
Alan FarrellFine Gael · Dublin Fingal
Tá
Bernard DurkanFine Gael · Kildare North
Tá
Brendan GriffinFine Gael · Kerry
Tá
Brendan HowlinLabour Party · Wexford
Níl
Brendan SmithFianna Fáil · Cavan-Monaghan
Tá
Brian LeddinGreen Party · Limerick City
Tá
Carol NolanIndependent · Offaly
Níl
Cathal BerryIndependent · Kildare South
No vote
Cathal CroweFianna Fáil · Clare
Tá
Catherine ConnollyIndependents 4 Change · Galway West
Níl
Catherine MartinGreen Party · Dublin Rathdown
Tá
Charles FlanaganFine Gael · Laois
Tá
Charlie McConalogueFianna Fáil · Donegal
Tá
Christopher O'SullivanFianna Fáil · Cork South-West
Tá
Cian O'CallaghanSocial Democrats · Dublin Bay North
Níl
Ciarán CannonFine Gael · Galway East
Tá
Claire KerraneSinn Féin · Roscommon-Galway
Níl
Colm BrophyFine Gael · Dublin South-West
Tá
Colm BurkeFine Gael · Cork North-Central
Tá
Cormac DevlinFianna Fáil · Dún Laoghaire
Tá
Damien EnglishFine Gael · Meath West
Tá
Danny Healy-RaeIndependent · Kerry
Níl
Dara CallearyFianna Fáil · Mayo
Tá
Darragh O'BrienFianna Fáil · Dublin Fingal East
Tá
Darren O'RourkeSinn Féin · Meath East
Níl
David CullinaneSinn Féin · Waterford
Níl
David StantonFine Gael · Cork East
Tá
Denise MitchellSinn Féin · Dublin Bay North
Níl
Dessie EllisSinn Féin · Dublin North-West
Níl
Éamon Ó CuívFianna Fáil · Galway West
Tá
Eamon RyanGreen Party · Dublin Bay South
Tá
Emer HigginsFine Gael · Dublin Mid-West
Tá
Eoin Ó BroinSinn Féin · Dublin Mid-West
Níl
Fergus O'DowdFine Gael · Louth
Tá
Francis Noel DuffyGreen Party · Dublin South-West
Tá
Frankie FeighanFine Gael · Sligo-Leitrim
Tá
Gary GannonSocial Democrats · Dublin Central
Níl
Ged NashLabour Party · Louth
Níl
Heather HumphreysFine Gael · Cavan-Monaghan
Tá
Helen McEnteeFine Gael · Meath East
Tá
Hildegarde NaughtonFine Gael · Galway West
Tá
Imelda MunsterSinn Féin · Louth
Níl
Ivana BacikLabour Party · Dublin Bay South
Níl
Jack ChambersFianna Fáil · Dublin West
Tá
Jackie CahillFianna Fáil · Tipperary
Tá
James BrowneFianna Fáil · Wexford
Tá
James LawlessFianna Fáil · Kildare North
Tá
James O'ConnorFianna Fáil · Cork East
Tá
Jennifer Murnane O'ConnorFianna Fáil · Carlow-Kilkenny
Tá
Jim O'CallaghanFianna Fáil · Dublin Bay South
Tá
Joan CollinsIndependents 4 Change · Dublin South-Central
Níl
Joe O'BrienGreen Party · Dublin Fingal
Tá
John BradySinn Féin · Wicklow
Níl
John LahartFianna Fáil · Dublin South-West
Tá
John Paul PhelanFine Gael · Carlow-Kilkenny
Tá
Johnny GuirkeSinn Féin · Meath West
Níl
Johnny MythenSinn Féin · Wexford
Níl
Josepha MadiganFine Gael · Dublin Rathdown
Tá
Kieran O'DonnellFine Gael · Limerick City
Tá
Leo VaradkarFine Gael · Dublin West
Tá
Louise O'ReillySinn Féin · Dublin Fingal West
Níl
Mairéad FarrellSinn Féin · Galway West
Níl
Marc MacSharryFianna Fáil · Sligo-Leitrim
NílAgainst party
Marc Ó CathasaighGreen Party · Waterford
Tá
Marian HarkinIndependent · Sligo-Leitrim
Níl
Martin BrowneSinn Féin · Tipperary
Níl
Martin HeydonFine Gael · Kildare South
Tá
Martin KennySinn Féin · Sligo-Leitrim
Níl
Mary ButlerFianna Fáil · Waterford
Tá
Matt CarthySinn Féin · Cavan-Monaghan
Níl
Matt ShanahanIndependent · Waterford
Níl
Mattie McGrathIndependent · Tipperary South
Níl
Maurice QuinlivanSinn Féin · Limerick City
Níl
Michael CollinsIndependent Ireland · Cork South-West
Níl
Michael CreedFine Gael · Cork North-West
Tá
Michael FitzmauriceIndependent Ireland · Roscommon-Galway
Níl
Michael Healy-RaeIndependent · Kerry
Níl
Michael MoynihanFianna Fáil · Cork North-West
Tá
Michael RingFine Gael · Mayo
Tá
Micheál MartinFianna Fáil · Cork South-Central
Tá
Mick BarryPeople Before Profit-Solidarity · Cork North-Central
Níl
Neale RichmondFine Gael · Dublin Rathdown
Tá
Neasa HouriganGreen Party · Dublin Central
Tá
Niamh SmythFianna Fáil · Cavan-Monaghan
Tá
Norma FoleyFianna Fáil · Kerry
Tá
Ossian SmythGreen Party · Dún Laoghaire
Tá
Pa DalySinn Féin · Kerry
Níl
Pádraig O'SullivanFianna Fáil · Cork North-Central
Tá
Paschal DonohoeFine Gael · Dublin Central
Tá
Pat BuckleySinn Féin · Cork East
Níl
Patricia RyanIndependent · Kildare South
No vote
Patrick CostelloGreen Party · Dublin South-Central
Tá
Patrick O'DonovanFine Gael · Limerick County
Tá
Paul DonnellySinn Féin · Dublin West
Níl
Paul KehoeFine Gael · Wexford
Tá
Paul McAuliffeFianna Fáil · Dublin North-West
Tá
Peadar TóibínAontú · Meath West
Níl
Pearse DohertySinn Féin · Donegal
Níl
Peter FitzpatrickIndependent · Louth
Níl
Réada CroninSinn Féin · Kildare North
Níl
Richard BrutonFine Gael · Dublin Bay North
Tá
Richard O'DonoghueIndependent Ireland · Limerick County
Níl
Robert TroyFianna Fáil · Longford-Westmeath
Tá
Roderic O'GormanGreen Party · Dublin West
Tá
Róisín ShortallSocial Democrats · Dublin North-West
Níl
Rose Conway-WalshSinn Féin · Mayo
Níl
Ruairí Ó MurchúSinn Féin · Louth
Níl
Seán CanneyIndependent · Galway East
Níl
Seán CroweSinn Féin · Dublin South-West
Níl
Sean FlemingFianna Fáil · Laois
Tá
Seán HaugheyFianna Fáil · Dublin Bay North
Tá
Seán SherlockLabour Party · Cork East
Níl
Simon CoveneyFine Gael · Cork South-Central
Tá
Stephen DonnellyFianna Fáil · Wicklow
Tá
Steven MatthewsGreen Party · Wicklow
Tá
Thomas ByrneFianna Fáil · Meath East
Tá
Thomas PringleIndependents 4 Change · Donegal
Níl
Violet-Anne WynneIndependent · Clare
Níl
Willie O'DeaFianna Fáil · Limerick City
Tá

The full text TDs voted on

This vote decided the motion as changed by the amendments agreed earlier in this debate. Read the original and the amendments below together.

A motion can bundle several proposals together. Tá or Níl applies to the whole question put, so a TD may agree with one part and still vote against it because of another. Read the full wording, and the debate where TDs gave their reasons, before treating this vote as a position on any single point.

The motion as movedDecided in this voteMoved by Deputy Michael Fitzmaurice on Wednesday, 16 October 2024

That Dáil Éireann:
notes that:
— inflationary pressures over the past number of years have significantly exacerbated financial pressures on both consumers and businesses, particularly within the food service sector, which has been severely impacted by the spiralling costs of energy, food produce, insurance, labour and supply chain disruptions;
— food-serving hospitality businesses, and hospitality businesses more generally, were among the hardest hit by the economic consequences of the COVID-19 pandemic, with many food-led businesses experiencing a sharp decline in revenue due to lockdowns, public health restrictions, and subsequent changes in consumer behaviour;
— energy, labour and supply chain costs have sharply increased over the past two years, with food service businesses, including restaurants, cafés and pubs, finding themselves disproportionately affected due to their high operational dependency on energy and fresh supplies, alongside growing difficulties in hiring and retaining staff in a competitive labour market;
— the temporary reduction in the VAT rate for the hospitality sector during the COVID-19 pandemic, which applied to food sales, provided critical and timely relief to many struggling food service businesses, enabling them to remain viable, maintain jobs, and serve their local communities during a period of profound economic disruption;
— however, this temporary VAT reduction ended in September 2023, resulting in a 50 per cent increase in the hospitality sector's VAT rate from 9 per cent to 13.5 per cent, which has further exacerbated financial pressures on food-led businesses and threatened their viability;
— the Restaurants Association of Ireland (RAI), in its pre-Budget submission, has formally requested the reinstatement of a lower VAT rate specifically for food sales, not the accommodation element of the hospitality sector, highlighting the necessity of such a measure to ensure the survival of the food sector in the face of the cost of doing business challenges facing the hospitality sector;
— food-led businesses play an essential role in Ireland's economy, providing employment for tens of thousands of individuals, particularly in rural and regional areas, where restaurants and cafés are often integral to the local economy and serve as key drivers of tourism and community life;
— food businesses also contribute significantly to Ireland's cultural identity, promoting local cuisine and food heritage, while being instrumental in attracting international tourists to the country, a sector that is critically important to the broader Irish economy;
— the reversion to a higher VAT rate for food sales has exacerbated financial pressures on small- and medium-sized food service businesses, with many facing the prospect of closure due to the unsustainable nature of current operating conditions, as demonstrated by the closure of over 600 food-led businesses in the past twelve months alone; and
— the food service sector is still reeling from the long-term effects of the COVID-19 pandemic, including the warehousing of revenue debts which are now coming due for repayment, further compounding the financial burden on businesses that are already struggling to cope with rising costs;
recognises that:
— many restaurants, cafés and other food-serving hospitality businesses continue to grapple with the financial fallout from COVID-19 restrictions, with inflationary pressures and labour shortages now posing additional, severe challenges to their operational viability;
— a competitive VAT rate, as opposed to the current rate which ranks amongst the highest in the European Union (EU), is not only critical to the viability of the food service sector, but is also essential to the broader economy, given the sector’s role in providing employment, supporting tourism and fostering community resilience, particularly in rural and regional areas;
— reinstating a 9 per cent VAT rate specifically for food sales would enable businesses to manage rising operational costs more effectively, reduce the need to pass on price increases to consumers and provide a safeguard against the potential closure of many more food-led enterprises, which would otherwise risk the loss of jobs and vital community services;
— food-led businesses face a unique set of challenges that differ from other parts of the hospitality sector, including hotels in larger cities that can rely on high-margin accommodation services and practices such as dynamic pricing to maintain profitability in the face of rising costs meaning, as such, that hotel rooms and all-inclusive or bed and board deals should not attract the lower VAT rate intended to assist food-led businesses;
— the reinstatement of a lower VAT rate for food sales would directly benefit consumers, by ensuring that food service businesses can absorb some of the rising costs of raw materials, energy, and labour without passing on unsustainable price increases to customers, many of whom are already struggling with the rising cost of living;
— the successful implementation of similar VAT reductions on food sales in other EU member states, in accordance with EU VAT law, demonstrates that such measures are both feasible and effective, providing essential relief to struggling food service sectors in times of economic difficulty, and promoting long-term stability and job retention within the sector;
— successive increases to the National Minimum Wage, while aimed at improving living standards, have contributed to wider wage inflation across the food service sector, further increasing the financial strain on businesses that already operate on narrow margins;
— the introduction of, and subsequent increases in, statutory paid sick days, though beneficial for workers, have added additional costs to employers in the food service industry, many of whom are struggling to absorb these new financial and regulatory obligations in the face of rising operational costs; and
— the impending introduction of pension auto-enrolment will further increase the cost burden on employers, particularly small- and medium-sized businesses in the food-led sector, who must now account for these additional mandatory contributions, compounding the financial pressures caused by inflation and other regulatory changes;
acknowledges that:
— the previous temporary VAT reduction for the hospitality sector demonstrated the positive and wide-reaching effects of such a measure, helping to sustain jobs, protect businesses, and secure Ireland's reputation as a leading food tourism destination;
— EU VAT directives allow member states to apply lower VAT rates to specific sectors, including food sales, thereby offering the Government a legally sound and flexible framework for implementing the permanent reinstatement of a lower VAT rate for food-led businesses, without breaching European law or undermining public finances;
— the distinct operational and financial needs of food-led businesses, which often operate on narrower margins and face higher fixed costs than other parts of the hospitality sector, necessitate targeted VAT relief measures that are specifically designed to protect and support these businesses; and
— food service businesses, particularly those operating in smaller towns and rural areas, serve as economic and social hubs within their communities, offering essential services and contributing to the social fabric of Irish society; and
calls on the Government to:
— permanently reinstate a lower 9 per cent rate of VAT on food sales in Ireland, in line with the pre-Budget submissions of the Restaurants Association of Ireland, ensuring that this rate applies specifically to food-led businesses and not to other parts of the hospitality sector such as the provision of accommodation by hotels;
— ensure that this targeted VAT relief measure is implemented in a way that reflects the specific needs of food-led businesses, including restaurants, cafés and other food service establishments, which are uniquely vulnerable to rising operational costs and inflationary pressures;
— recognise the critical contribution of the food service sector to the Irish economy and prioritise the protection and sustainability of this sector as a vital component of the country's broader economic and social infrastructure;
— take into account the long-term benefits of reinstating a lower VAT rate for food sales, including increased job retention, enhanced economic resilience, the continued growth of Ireland's food tourism industry and the preservation of Ireland's unique cultural and culinary heritage; and
— engage in meaningful and sustained dialogue with representatives of the food service sector, including the Restaurants Association of Ireland, to ensure that future VAT policy decisions are informed by the real-world experiences and challenges facing businesses and consumers and that any future changes to VAT rates are designed to foster long-term stability and competitiveness within the sector.

Amendment No. 1Decided in this voteMoved by Minister of State at the Department of Enterprise, Trade and Employment, Deputy Emer Higgins

To delete all the words after "Dáil Éireann" and substitute the following:
"notes that:
— the Government is very conscious of the needs of the tourist and hospitality sector and wants to maintain a healthy and profitable environment for these sectors going forward;
— in this regard, it reduced on a temporary basis the Value Added Tax (VAT) rate from 13.5 per cent to 9 per cent on 1st November, 2020, in recognition of the fact that the sector was amongst the most impacted by the public health restrictions put in place throughout the pandemic;
— the cost of this VAT measure for the period from 1st November, 2020, to 31st August, 2023, was over €1.3 billion, and this represented a very substantial support by the Government to the hospitality and tourism related sectors;
— the cost of a further temporary VAT reduction to 9 per cent for a full year is estimated to be €868 million, and even where the measure is restricted to food and catering services, the estimated full year cost is €675 million; and
— Ireland is not significantly out of line with other countries in relation to the application of VAT in this sector, for instance, it is noteworthy that 14 European Union (EU) countries have a VAT rate of 12 per cent or higher on food services, and our nearest neighbour, Great Britain and Northern Ireland, has a VAT rate of 20 per cent on food services;
recalls that:
— the hospitality sector benefits when consumers have greater disposable income, so Government measures to address cost-of-living issues benefit business through increased household income;
— the Government has made substantial fiscal support available to assist with the cost-of-living challenges that arose after the global increase in energy prices;
— changes were made to the tax Debt Warehousing Scheme earlier this year, including a reduction in the interest rate on warehoused debt to zero per cent, which provided critical support to businesses in the hospitality sector (amongst other sectors) at a very difficult time;
— during the summer, the Government agreed a range of measures to assist businesses in adjusting to increased costs and to improve the cost competitiveness of firms more generally, and these measures included:

Amendment No. 1 to amendment No. 1Moved by Deputy Ged Nash

To insert the following after "the 2 per cent USC ceiling band increased by 34 per cent or €6,898, going from €20,484 to €27,382":
"further notes that:
— individual hospitality sector businesses are facing a number challenges;
— employment in the accommodation and food services sector is close to an all-time high of 190,000, and focus must be on addressing the structural issues required to sustain businesses in the sector to improve innovation, skills development, productivity and sustainability;
— average hourly earnings in the accommodation and food sector continues to be one of the lowest of any economic sector;
— the National Minimum Wage (NMW) remains below the level needed for a living income, and supports calls for it to be linked to 66 per cent of average hourly wages, above the Government target of 60 per cent from 2026;
— there is an 'inability to pay' clause in law for employers who are unable to pay NMW rates to enable them to seek an exemption from increases; and
— Ireland lags behind other European countries on the provision of worker's rights and benefits, and that auto-enrolment and statutory sick pay are long overdue;
calls for:
— the establishment of a State agency to support the hospitality sector, modelled on Teagasc, to boost sustainability and productivity, and provide research, advisory and training services;
— a strategy to drive down costs for small businesses focused on energy and insurance prices;
— increased discretionary powers for local authorities to levy a hotel bed tax if they wish, as is the norm in other European countries, to fund investment in the public realm of our cities and towns;
— reform of the outdated commercial rates system; and
— reform of outdated licensing laws to support the night-time economy".

Wording as published in the official Dáil record, unedited. Read the debate