Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The Government does not have any plans to change the rate of VAT. It is important to put on the record that no political party in this House that I am aware of has called for such a reduction either. The key issue raised by businesses with me consistently is costs, not a lack of demand. It is the accumulation of various costs imposed on them, many by direct Government decisions. That is what we need to reflect on in the period ahead. The only way a reduction in VAT would improve the viability of a business is if that reduction in VAT, which is a consumer tax, is not passed on to the customer. That is the only circumstance in which a reduction in VAT would offer the business improved viability. The issue is costs, not VAT.

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