Sir, – Eoin Burke-Kennedy notes that VAT returns for January 2024 increased by €148 million on the same month in 2023, and speculates that this may have been caused by higher consumer prices and a “technical factor” linked to the withholding of VAT in previous years which has skewed the figures somewhat (“State collected €7.8bn in tax in January amid strong VAT receipts”, Business, February 7th).
By far the most obvious likely reason for the increased returns is the hike of VAT on the hospitality sector from 9 per cent to 13.5 per cent last September. The Department of Finance projects that this will generate an additional €50 million each month in 2024, which would account for over a third of the additional VAT in January.
It’s no great economic mystery that big tax hikes should lead to increased tax returns. The only real mystery is why, at a time of bumper tax returns and escalating costs, the Government is heaping more tax on business and consumers. – Yours, etc,
BARRY WALSH,
Dublin 3.
Sir, – As an Irish hospitality professional living and working in Boston, I cannot but feel for the restaurateurs in Ireland who are struggling with the VAT rates the Government is hobbling them with.
We too have state and city-imposed tax rates here in Massachusetts. The difference I see is that we put them as individual line items on the bill in addition to the menu price the customer receives, thus showing the customer what they are in fact paying in taxes. Bring back the 9 per cent rate. It would be a shame to see an industry that has come so far in talent, food quality and provenance disappear. – Yours, etc,
PAUL WILSON,
Scituate,
Massachusetts, US.