Petrol and diesel prices to rise from Friday as Government increases excise duty
Irish consumers will be facing higher prices for fuel, hospitality and hairdressers from Friday as the Government increases VAT and excise duty.
The lower 9 per cent VAT rate on hospitality businesses will come to an end, increasing to 13.5 per cent from midnight.
Excise duty on fuel will also increase, meaning petrol will cost an extra 7 cent per litre, and diesel 5 cent more.
There have been calls on Minister for Finance Michael McGrath to reconsider the VAT and excise increases by various industry lobby groups.
The Restaurants Association of Ireland described the move by the Government to increase the VAT rate to 13 per cent as "nonsensical" and "the final nail in the coffin for many small cafes, restaurants and food led pubs."
Chief executive Adrian Cummins said: "The increase is wrong at a time when the country needs to reduce inflation, a VAT increase only adds to inflation. Government need to restore the 9 per cent VAT for food-related hospitality businesses in Budget 2024, and we will be making the case for this when we meet with the Minister for Finance next week."
The Licensed Vintners Association (LVA) said the 9 per cent rate was "at the right level" and the increase would only "add to inflation".
"By moving ahead with the VAT rise, we will effectively see menus changed across the country so the Government can collect additional taxation from the public – heaping further pressure on already hard-pressed consumers," said Donall O’Keeffe, chief executive of the LVA.
Economist Jim Power said the VAT and fuel duty increase on September 1st will add significantly to the cost of living and should have been postponed by the Government.
He told Newstalk radio: "Unfortunately these increases are coming on top of pre-existing price pressures, because we've seen, due to international developments, the price of energy rising in recent weeks, and that's already been reflected in more expensive petrol and diesel at the petrol pumps."
He added: "There is nothing forcing the Government to increase both of those taxes. In the budget, I would expect to see money being directed at the poorest sections of society to help them deal with the cost-of-living crisis that's out there at the moment."