Alcohol VAT rate and licensed trade
Sir, — I refer to the letter published on July 3rd from Eunan McKinney of Alcohol Action Ireland. We are seeking a reduction of the current VAT rate on on-trade alcohol on a temporary basis until December 31st as a support measure for a vast network of 5,000 members across the country that have been devastated by the Covid-19 pandemic. This measure is intended to boost the viability of the businesses themselves, rather than stimulate demand.
Drinks and hospitality businesses have been closed for almost four months during the Covid-19 pandemic. Today, 60 per cent of those businesses remain closed across the country and, if they intend to reopen, will be among some of the last businesses in the country to do so on July 20th.
About one-third of the alcohol revenue generated by the on-trade sector is taken in tax by Government and diverted from customers, staff, and investment. This very large tax burden is not justifiable in the exceptional circumstances we are faced with, and the changes that need to be made to allow a safe reopening in accordance with Government guidelines.
A reduction in VAT on alcohol would deliver an immediate cash injection to businesses to help them through the difficult trading period ahead as demand is reduced and costs increase. The alternative is that many businesses will never open again. – Yours, etc.
The Vintners Federation
of Ireland (VFI);
The Licensed Vintners