More than 600 restaurants, cafés and other food-serving businesses have closed since the Government hiked the hospitality VAT rate last September.
The Restaurants Association of Ireland (RAI) is calling for a reintroduction of the 9% VAT rate for hospitality in Budget 2025.
It said the Government "must provide targeted support to Ireland’s hospitality sector - the industry most affected by the current sky-high cost of doing business and experiencing a heightened level of closures as a result".
The RAI claims that "economic carnage" being caused by restaurant closures, coupled with bumper tax receipts provided by the hospitality sector when the 9% VAT rate was in place, mean the higher VAT rate is starting to cost the Government more than the estimated cost of reinstating the lower rate.
'Unified appeal' from restaurants
Restaurants Association of Ireland CEO Adrian Cummins said there is an abnormal level of closures.
"While Government departments may suggest that for every restaurant closure across the country another one opens, the reality is that this is not the case – particularly in rural and regional Ireland," he said.
"The public is well aware of the abnormal level of closures within the industry, with recent Amárach Research polling showing that 67% know of a small business closure in their local area this year.
"Following recent meetings we have held with him, Minister for Finance Jack Chambers is now fully aware of the hospitality industry’s unified appeal for Budget 2025: the reinstatement of the 9% VAT rate on food, not accommodation, to safeguard the sector's future.
"Our members are not asking for short-term grants, but for long-term viability," he added.
Last month saw 35 businesses close, while the RAI said that many others are "merely waiting for Budget 2025 on October 1st before making a final decision on whether to close or not".
In a survey in April, 212 RAI members said they would have to strongly consider closing down their business within the next year if the 9% VAT rate on food is not reinstated.
