Richard O'Donoghue (Limerick County, Independent) | Oireachtas source

In 2020, people got 16.5 gallons of fuel for €100. Today, that same 16.5 gallons of fuel costs €139.42. In 2020, per €100 of fuel, the Government took €45 in tax on diesel and €50 in tax on petrol. Today, the Government is taking €62.74 in tax on diesel and €69.71 in tax on petrol. For a gallon of fuel, which is the same product we are paying for and getting today, the Government has now increased tax on 16.5 gallons of fuel by €17.74 for diesel and €29.71 for petrol. Even though we are getting the same product, we are paying €40 more in tax per €100, but the Government is taking €29.71 extra in taxes on petrol and €17.74 extra on diesel.

This has a knock-on effect on food producers using the transport network throughout the country. In the hospitality sector, the VAT rate was at 9%. We then had an increase in the minimum wage, which I welcomed. However, the Government put the VAT rate for the hospitality sector back up to 13.5%, which left people with no other option than to raise the price of their product. That sector could have absorbed the increased costs if the VAT rate was left at 9%. That could have absorbed the increases but the Government put 4.5% VAT back on. This means that while the cost of someone's lunch was €10 at one time, that person is now paying €15 or €15.50 for the same lunch to absorb the cost due to the change in the tax rate.

I use a business model for everything I do. I want businesses to survive. Common sense tells us that if a measure such as raising a wage is brought in, it has to be absorbed somewhere. By putting up taxes, however, it dilutes or gets rid of the wage increase that was given in the first place. The minimum wage was increased but as the price of the product people were trying to buy in order to live also increased, the Government created inflation. By reducing the tax rate, however, the Government will get the same tax margin back. As the cost of the product has gone up, the Government has less tax to take. Reducing the tax rate means people get more for their money. That is common sense. That is a business model.

People are in crisis in the country. They are working every day and hour to do what? To pay extra taxes. Will the Government please look at reducing the VAT rate for the hospitality sector to 9%? It can be left at 13.5% for a bedroom stay, but it should be reduced for the working person.

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