"With some of the chains already making super-sized profits of tens of millions of euro, a cut to their tax liability could go straight to the bottom line. That is even as they face higher labour costs as the Government mulls raising the minimum wage. Earlier this week, Ryanair boss Michael O'Leary described the planned Vat cut as a "scam", and insisted the Government needs to stop increasing the minimum wage."
""The Government should under no circumstance reduce the Vat on hospitality such as on restaurants or anything else from 13pc to 9pc. They are going to trouser the money. It won't get passed on to consumers," he said. "Simon Harris got bounced into this at the last election. He should grow a pair of balls and tell the hospitality industry, that's it.""
""Our industry is in trouble in terms of margin and trying to stay afloat," he said. The most recent publicly available accounts for Pat McDonagh's Supermac's show it made a €43.6m pre-tax profit in 2023 on revenue of €294.3m. McDonald's - whose revenue is generated from fees received from franchisees and sales to them - made a pre-tax profit of €42m in 2024 on revenue of €84.4m."
A proposed reduction of the hospitality VAT rate from 13.5% to 9% is planned for Budget 2026 and is projected to cost the Exchequer nearly €900m annually. Large restaurant chains currently report substantial pre-tax profits alongside rising labour costs and potential minimum-wage increases. Public accounts show Supermac's €43.6m pre-tax profit on €294.3m revenue (2023) and McDonald's €42m pre-tax profit on €84.4m revenue (2024). US fast-food brands are expanding in Ireland through franchisees. Concerns exist that VAT savings could increase chain margins rather than lower consumer prices.
Read at Irish Independent
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