Officials warned a cut in VAT for cafes, restaurants, and fast-food chains would come at an “extremely significant” cost to the taxpayer and would create a lot of “deadweight” by supporting businesses that did not need help. Officials said if three proposed cuts to VAT – including measures on energy and apartment sales – went ahead, the tax loss would be €1.2 billion. The submission said most hospitality businesses would simply pocket the savings generated from the tax reduction. In advance of the budget, there were discussions over whether the tax cut could be more targeted to exclude highly profitable fast-food chains or restaurants in hotels. “This could lead to the underpayment of VAT because the charge for accommodation and meals would have to be apportioned,” the submission said.

Source: Irish Examiner December 28, 2025 11:59 UTC