Fine Gael meeting hears calls to extend 9 per cent tourism Vat rate

The nine per cent Vat rate should be extended to protect rural and regional hotels rather than see them punished for “price gouging” practices in Dublin, the Fine Gael parliamentary party has heard.

The meeting also heard that special accommodation will have to be made to ensure farmers benefit from measures in the budget designed to support small businesses - as many received their bills as domestic rather than business customers.

The meeting on Wednesday evening also heard calls to stall planned increases in the carbon tax, as well as widespread praise for Minister for Social Protection Heather Humphrey’s pension reforms announced this week.

Several members raised the issue of adequate provision of school buses, including Minister of State Martin Heydon, who said it was the biggest issue that had been raised with his constituency office over the summer.

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Several members told Minister for Finance Paschal Donohoe, who is putting the finishing touches to next week’s budget, that rural and regional hotels needed the benefit of the nine per cent Vat rate, arguing that there was a difference between family-run establishments outside the capital and large commercial operations which had been charging high rates over the summer in Dublin.

Senators Tim Lombard, Jerry Buttimer and Micheál Carrigy raised the issue with Mr Donohoe, who had a well-publicised clash with the hotel industry earlier this summer when in a private meeting he admonished them for the rates they were charging, while simultaneously seeking an extension to the lower Vat rate.

Mr Donohoe told the senators that he was “aware of the issue” and that his comments had generated a “lot of coverage”, telling the meeting however that he stood by his point. He said the sector was incredibly important and that the Government had invested billions during the Covid-19 pandemic and that there were issues regarding value for money.

Elsewhere, Tánaiste Leo Varadkar told the meeting - the last before the budget - that anything provided to small businesses to reduce the cost of energy in the budget should also be provided to farmers, and that many farmers receive their energy bills as domestic customers which would have to be taken into account. He attended the ploughing championships in Laois today.

Mr Varadkar also told the meeting that there were no proposals on the agenda to increase inheritance tax rates or lower the threshold, as had been suggested by the Commission on Tax and Welfare.

The Tánaiste told the meeting that there are three elements to every household budget - how much someone is paid, how much they keep after tax and how far the money goes. He said Fine Gael wants to help with all three.

Mayo TD and former Cabinet minister Michael Ring raised planned hikes to the carbon tax due in the budget which are already legislated for, saying they should be stalled due to the cost of living crisis.