Michael Collins TD Criticises 2025 Budget, Slams Government Inaction on Hospitality VAT Rate

Independent Ireland Leader Michael Collins TD, has issued a sharp condemnation of the government's 2025 budget, describing it as an exercise in financial manipulation that neglects the critical needs of struggling sectors like hospitality. Collins highlighted the alarming number of restaurant closures since the government raised the VAT rate for hospitality, which he argues has led to a crisis in the industry.

"This budget is little more than an exercise in robbing Peter to pay Paul," Collins said. "What is most scandalous of all is that they know over 600 restaurants have closed so far this year, and they chose to do nothing about the VAT rate for hospitality."

Since the government ended the special 9% VAT rate for hospitality in September 2023, increasing it to 13.5%, the sector has been hit hard. According to the Restaurants Association of Ireland (RAI), 577 restaurants have closed in the 11 months following the VAT hike.

A report by Deloitte showed that insolvencies in the hospitality sector surged by 88% in the first half of 2024, exacerbated by the higher VAT rate, energy costs, insurance, and rising labor expenses.

Collins continued: "These closures are not just statistics—each one represents jobs lost, businesses destroyed, and communities suffering. It's disgraceful that the government has turned a blind eye to this."

The economic fallout from these closures is significant, with economist Jim Power estimating that each restaurant closure costs the economy €1.36 million on average. Despite this, the government has chosen not to revert the VAT rate, even though the RAI has argued that maintaining the higher rate is costing the State more money than it would save by restoring the lower VAT.

"This government’s inaction is not just neglectful—it’s harmful. They are ignoring the pleas of small businesses, workers, and communities. They throw around budget figures like monopoly money, without considering the real-world impact on people’s livelihood