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Irish officials oppose 9% VAT cut for hospitality, citing cost, ineffectiveness, and complexity.
Irish government officials warned that a proposed VAT cut for the hospitality sector from 13.5% to 9% could cost €1.2 billion, calling it a poorly targeted "blunt" measure unlikely to help struggling businesses.
They cited evidence that past VAT reductions were not consistently passed to consumers, with profits often retained by businesses.
Mixed data on sector health, including rising employment, and EU rules preventing targeted cuts based on size or location, further undermined the proposal.
Officials also raised concerns about administrative complexity and tax avoidance risks if different rates applied to food and accommodation.
Minister Paschal Donohoe acknowledged the challenges but said the upcoming budget would not include large tax credit increases.
Los funcionarios irlandeses se oponen al recorte del 9% del IVA para la hospitalidad, citando costos, ineficacia y complejidad.