(Seo alt ónár bhfoireann nua Gaeltachta. Is féidir an bunleagan as Gaeilge a léamh anseo.)

THE OWNER OF a café in Conamara has said that the reductions in the rate of VAT from July 2026 onwards for the food-led hospitality sector will not significantly reduce costs for small businesses.

Speaking to The Journal, Diarmuid Ó Mathúna, the owner of Pota café in the Conamara Gaeltacht said that the savings will “not be too big” because of the rise in minimum wage and pension payments for workers announced in the budget. 

Based on his calculations, Ó Mathúna believes that the rate of VAT dropping from 13.5% to 9% will save around €7,000 in the space of a year. However, other measures announced in the budget such as the rise in pension payments and minimum wage means he will be down around €14,000. 

“We won’t be able to pass this cut on VAT onto customers as other costs have risen and I will be worse off,” he said. 

“We are a seasonal business and things are busy during the summer but that drops off at the end of August onwards.”

“It’s also difficult to get people to work here on a long-term basis, and we are dependent on people who are in university or who want a job for the summer.”

“Sometimes I would be working on my own serving on the floor, and that’s just one of the problems we face here.”

Another difficulty for An Pota is that the number of tourists travelling to Conamara has decreased, according to figures from Fáilte Ireland, which has a negative effect on Gaeltacht businesses.

Ó Mathúna has seen a reduction in tourists from America coming to Conamara and that it is actually French and German tourists that were around most during the summer.

“Whether it’s because of Israel and Palestine or Trump’s relationship with Ireland, there has been a reduction in tourists from America. We also have problems because we have high accommodation costs and we are uncompetitive in that sense,” he said.

As a seasonal business, Ó Mathúna says that cashflow can be difficult in January and February, and that An Pota only gets busy again around the Easter holidays. 

He says that he will be paying the higher level of VAT for the first half of 2026, and that he will also be paying higher payments for minimum wage and pensions from earlier on in the year.

Despite this, Ó Mathúna is happy with the government’s decision to lower the rate of VAT from July 2026 as it is something he “has been fighting and campaigning for”.

“These are exceptional times and there are so many more challenges now than there was once, even since Covid. Prices are rising and a lot of businesses are closing because of that, so we are very thankful,” Ó Mathúna said. 

“I do hope the reduction in VAT will give businesses the confidence to weather the path and stay open for a long-time in the future.”

The Journal’s Gaeltacht initiative is supported by the Local Democracy Reporting Scheme