Businesses collapsing on our main streets

Rural towns and villages “are suffering big time” according to one councillor while another said that “businesses are collapsing on our main streets” and that pubs in rural areas are “closing like dominoes.”
Both councillors laid the blame for the problem at the door of the Government which has increased the VAT rate for the hospitality sector from 9% to 13.5% effective from September 1.
Cllr Felim Gurn (Independent) and Cllr Sean McGowan (Fianna Fáil) both tabled motions at last Monday's meeting of Leitrim County Council calling on the Government to retain the 9% VAT rate on the hospitality sector and extend it until the end of 2024.
Cllr Gurn who is a publican in Manorhamilton can see for himself the impact the VAT increase is having.
“Sky TV has doubled, rates have gone up, wage costs have gone up and suppliers have gone up.” He also noted that drinks giant Diagio has raised prices recently.
“If this happened in the farming sector, they would be out rioting on the streets,” he said, adding that many people will not “take a chance and open businesses.”
Cllr McGowan said there is an opportunity to change it again in the budget and called on the Minister for Finance and Government to revert to the 9% until Christmas 2024.

Cllr Felim Gurn asked that the members seek the support of the members of Leitrim Council in calling on the Minister for Finance to retain and extend the 9% VAT rate on food related businesses to the end of 2024.
The rate of Irish VAT which applies to certain goods and services, mainly in the tourism and hospitality sector, will increase from 9% back to 13.5%, with effect from 1 September 2023, it was reported recently.
Cllr Gurn, who is a publican, said that his insurance has gone up, “Sky TV has doubled, rates have gone up, wage costs have gone up and suppliers have gone up.”
He also noted that drinks giant Diagio has raised prices recently.
Fuel prices have gone up leading to cost hikes to suppliers, he continued, adding that all workers will be entitled to 10 days paid sick leave by 2026 under plans which have been approved by Cabinet.
He said that while public realms and streets are being regenerated, “businesses are collapsing on our main streets” adding that pubs in rural areas are “closing like dominoes” and many no longer serve food.
“If this happened in the farming sector, they would be out rioting on the streets,” he said adding that many people will not “take a chance and open businesses.”
In March, it was reported that tourists are being turned away from booking trips to Ireland because of a bed shortage in hotels sparked by the refugee crisis, Fáilte Ireland claimed.
“If a tourist is spending money, that is keeping people employed but these rooms are not available,” he said
He said that VAT increase couldn't come “at a worse time, coming into the winter period where businesses are still feeling the effects of Covid.”
Cllr Gurn said, “The restaurant and pub is a huge community hub in our towns and villages where every aspect from a christening to your death is organised. A major factor that the government is not looking into is putting a decent night time economy bus link service through our rural towns and villages.”
Meanwhile, Cllr Sean McGowan said the increase in VAT from 9% to 13.5% is “alright for towns and cities who have big footfall” but rural towns and villages are “suffering big time.”
Cllr McGowan who sought the support of the members in calling on the Minister for Finance, Michael McGrath and the Government to support the campaign by the Restaurants Association of Ireland to retain the VAT rate of 9% for food related businesses and to extend the 9% VAT rate to the end of 2024,
He said he feared the hike will result in businesses closing down.
“It will have an impact here in rural Leitrim and they are big employers - restaurants, pubs - employing upwards of 30 and 40 people.”
He said, “There is a chance for the Government to change this again in the budget and I want the members to call on the Minister for Finance and Government to revert to the 9% to Christmas 2024.”