The chief executive of the Irish Restaurants Association, Adrian Cummins, has warned that the 50 per cent increase in VAT for the sector is going to lead to the closure of restaurants and job losses.
He also denied a Department of Finance assertion that the reduced VAT, which was introduced in an attempt to boost the industry, had meant a loss of €2.6 billion to the Exchequer.
Increased consumption had meant increased taxes, he told RTÉ's Morning Ireland.
The increase in VAT will be passed on to the consumer, added Mr Cummins. “The Government didn’t take Brexit into account. It’s just 88 days away and will have a huge impact on tourism especially in border areas.”
He pointed out that the 9 per cent VAT rate had been the norm in Europe while the new 13.5 per cent rate will be the third highest in Europe. "It doesn't make us competitive. This is going to have a huge effect on the industry.
“The Minister was wrong to change the VAT rate. Lots of businesses are going to have to decide if they are viable. The Government needs to sit down and review this,” he urged.
On the same programme Ruth Mulkern of the award winning Stef Hans Café in Thurles told of their decision to close the restaurant. "It was a layered decision. We spoke with our accountant and looked at the figures. A 50 per cent jump in VAT just doesn't make sense."
The restaurant, which featured in numerous good food guides, had between seven and 10 employees, some full time and some part time. It used produce from local suppliers who will also be impacted by this decision, added Ms Mulkern.
“Any one who tries to do anything for themselves is punished.”