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Many businesses not passing on VAT reduction - report

Out of 151 businesses checked by Senator Catherine Noone, only 16 had reduced their prices.

Image: Last Hero via Flickr

HIGH-PROFILE RESTAURANTS and cafés are failing to pass on the government VAT reduction to customers, according to an informal survey.

Out of 151 outlets examined, just 16 had reduced their prices – or just over ten per cent. The checks were carried out by the office of Fine Gael Senator Catherine Noone a day after the VAT rate was cut on July 1, the Sunday Times reports (subscription required). Some 38 businesses would not even discuss the subject.

Meanwhile, a separate poll carried out by the newspaper revealed that outlets operated by 10 well-known café chains have not passed on the price cut. Stores run by Café Sol, Butlers, Costa Coffee and O’Briens were among the offenders.

The VAT reduction was introduced in an attempt to boost domestic and tourism demand for goods and services. The measure saw sales tax cut from 13.5 per cent to nine per cent on eateries, hotels, cinemas and many printed publications at a cost of €120million to the taxpayer.

Read Gabrielle Monaghan’s full story in the Sunday Times here (subscription) >

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Michael Freeman

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