Businesses are hitting out at SIPTU's suggestion that the reduced 9 per cent VAT rate in the hospitality sector is not being passed on to customers, employees or the exchequer.

The trade union is calling on the Finance Minister to reinstate the 13.5% VAT rate in next week's budget unless employers agree to sign up to a new pay rates and conditions for workers in the hotel, restaurant and tourism sectors.

However, television broadcaster and owner of Treyvaud’s (Pron Trey-Vo's) restaurant in Killarney Paul Treyvaud (trey vo) has dismissed SIPTU's claims, describing them as "utter nonsense."

SIPTU Divisional Organiser, John King, stated: “Employers in the sector have refused to engage in discussions for a new Joint Labour Committee which would set fair wage rates and conditions for workers in hotels and restaurants across the country.

"Although it is government policy the workers in these industries should be covered by a JLC but employers have been given an effective veto over this policy by refusing to engage with trade unions and the labour relations machinery of the State. This veto needs to be removed. We have called on the Minister for Finance to withdraw the favourable VAT reduction policy given to hotel and restaurant owners unless they immediately agree to enter discussions on a new JLC for the hospitality sector.”

Chief Executive of the Restaurants Association of Ireland, Adrian Cummins responded: “SIPTU have once again proved their removal from reality with their typical anti-job creation rhetoric. This call to reverse the VAT rate is directly hindering the creation of 50,000 jobs by 2020 which will be possible if the VAT rate is kept at 9%.”

Minister for Transport, Tourism and Sport, Paschal Donohoe, spoke to Lunchtime with Jonathan Healy about the issue: