Small businesses facing imminent collapse due to enforced tax increases

Independent TD Richard O'Donoghue speaking in the Dáil.

MANY small Limerick businesses are facing imminent collapse due to Government-enforced tax increases.

That’s according to County Limerick politician Richard O’Donoghue who hit out that this coalition government is inflicting untold harm by relentlessly increasing the price of petrol and diesel.

“Simultaneously, they are hiking the VAT rate for the hospitality sector by almost 50 per cent. All of this transpires as the cost-of-living skyrockets, including rising loan repayments,” Deputy O’Donoghue said.

The Rural Ireland Independent TD went onto say that this is unfolding at a time when Irish people are grappling with the highest energy prices in Europe.

“It is abundantly clear that government TDs are turning a blind eye to these struggles, despite their feigned concern. The people are fed up with this charade and deserve better. Small businesses in rural towns and villages across County Limerick are now facing imminent collapse due to an avalanche of rising costs that they can no longer absorb,” he insisted.

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Deputy O’Donoghue also pointed out that, throughout rural Ireland, pubs, restaurants, and other eateries have endured a challenging summer hampered by adverse weather conditions. Many of these establishments, he continued, invested in outdoor dining facilities during the pandemic but were unable to utilise them this summer due to inclement weather.

“Imposing a VAT increase at a time when these businesses are struggling to survive amidst significant cost increases in energy, food, and labour is nothing short of reprehensible,” he said.

Rural tourism, he believes, deserves special consideration and should not be penalised for the price gouging tactics employed by some Dublin-based hotels during ‘compression nights’ or ‘major events’ that drive up demand and prices.

“The Government’s actions make it harder for everyone and completely undermine the competitiveness of Ireland’s tourism sector, forcing rural job losses and jeopardising the recovery and sustained growth of this vital industry,” the Limerick Independent TD said.

“Pre-pandemic, tourism generated nearly €10 billion in revenue, supporting 260,000 jobs across 20,000 mostly SMEs, thereby sustaining regional economies and rural communities nationwide. With foreign visitor numbers still far below pre-pandemic levels, the VAT rate hike will push many otherwise viable rural businesses to the brink.”

Deputy O’Donoghue also maintains the view that the nine per cent VAT rate should have been retained for the food service sector.

“These fuel and VAT increases will only funnel more tax revenue into the Exchequer, at a time when the state does not require additional funding, but the people desperately need relief. It’s disgraceful that fuel prices are surging while interest rates rise, and the cost of food remains exorbitant,” he concluded.

Pre-pandemic, overseas, and domestic tourism to Limerick generate an annual revenue of over €300million through around one million visitors per annum.