SIPTU has called on the Government to halt the planned reinstatement of the 9% VAT rate for the hospitality and services sectors, saying the estimated €680 million it will cost on an annual basis should instead be invested in targeted electricity credits for low to average-income households to help offset a “spiralling cost-of-living crisis”.
Addressing delegates gathered for the SIPTU Services Division Annual General Meeting in Liberty Hall, Dublin 1, today (Friday, 27th March), SIPTU Services Divisional Organiser, Adrian Kane, said: “The 9% VAT rate for food, catering, and hairdressing services is scheduled to return on 1st July 2026. This tax break represents a massive transfer of public wealth to often highly profitable businesses, while the workers who generate those profits remain trapped in a cycle of working poverty.
“It is a scandal that this Government continues to prioritise the margins of profitable businesses over the survival of the men and women who keep the services sector running. We are calling for an immediate halt to this tax break. The estimated €680 million this will cost the exchequer in a full year is money that belongs to the public. It should be used to provide direct relief to workers currently being crushed by the cost-of-living and energy crises.
He added: “In the services sector, we see workers every day who are struggling to get by. They are facing rents that consume more than half their take-home pay, alongside soaring energy costs and food inflation. To hand a tax break to their employers while these workers go under is not just bad economics; it is a moral failure.”
SIPTU Researcher, Michael Taft, said: “The Government’s track record is one of broken promises to workers. We have seen the implementation of the Living Wage pushed back to 2029 and the expansion of statutory sick pay put on ice, all at the request of business interests. Meanwhile, the same businesses are first in line for state subsidies.
“The hospitality and services sectors are notorious for low pay and precarious conditions. Providing a VAT reduction without any strings attached regarding pay or collective bargaining is essentially subsidising low-wage business models.”
He added: “We are demanding that the Government pivot, stop the VAT break and instead use that funding to introduce a targeted electricity credit, which would provide vital financial support for low to average-income households.”