Sligo County Council calls for reintroduction of 9% VAT rate for food led businesses

By Philip Rooney, The Sligo Champion

A motion calling on the Government to reinstate the 9% VAT rate for food-led businesses, starting on January 1, was passed at Monday’s monthly meeting of Sligo County Council.

Proposing the motion Cllr Ann Higgins said, “This will give businesses a fighting chance of succeeding during what is a challenging time for the industry. I struggled to think of a recently opened restaurant or café in Sligo, yet we know of many that have closed. We now have a situation where most are only opening five days a week to try and minimise costs.”

“We cannot accept a scenario where government delays the implementation of this commitment. It needs to be introduced now for the food-led businesses who are struggling, many of them on the breadline. Otherwise, heading to a café for a work lunch or a restaurant to celebrate family milestones will, I fear, become less frequent. And a sector that is essential for our sense of community, wellbeing, and tourism will be decimated.”

“To be clear, I am not seeking a blanket 9% VAT cut on accommodation, but a separate VAT rate for food-led businesses.”

Cllr Higgins outlined the difficulties that are being faced by businesses in Sligo saying, “Restaurants, cafés, gastropubs and other food-based businesses in Sligo are under severe pressure. Rising costs of essentials are forcing some previously profitable businesses to operate at a loss. Since January 2025, nearly 350 food businesses across Ireland have closed, leaving communities without vital social hubs. The sector has also seen a 6.7% decline in full-time employment in Q2 of 2025, with sales down 14% since October 2023.

“Nationally, 76.6% of hospitality enterprises employ fewer than 10 people, and 99.6% of food enterprises are SMEs. Only 73 enterprises (0.4%) are considered large businesses. For small businesses, reinstating the 9% VAT rate is essential for survival and long-term growth.

Cllr Higgins also referred to declining number of Tourism, a key driver of Sligo’s economy, is also down, with international visitor numbers falling 13.5% and tourism spend down 16.9% in the first half of 2025. This decline adds further strain to local hospitality businesses.

Addressing the meeting and supporting the motion Cllr Albert Gibbons said, “A lot of people used to eat out once a week, that has stopped. Food has gone up by 5% this year, wages haven’t gone up. The last thing we want to see is any restaurants in Sligo going out of business.”

Cllr Gibbons added, “I like a bit of t-bone steak at times. I went to a restaurant recently and they said they don't do it anymore because of costs.”

Anthony Gray, Owner of Hooked and Eala Bhan and member of the Restaurants Association of Ireland stated, “I welcome the move from Sligo County Council to stand behind the food led hospitality sector in Sligo.

“It is vital that Government fulfill their promise and reinstate the 9% VAT rate for struggling businesses on January 1, 2026. This comes after a very flat season was had by all hospitality providers in the North-West.”