[ad_1]
A VAT cut aimed at bolstering the struggling hospitality sector is expected in Tuesday’s budget, high-level government sources confirmed.
Today the may reveal three important details of the Budget 2021, which will be announced on Tuesday.
It is understood:
- Amid calls from the industry to return to the 9% rate introduced during the last crisis, a reduction in the VAT rate has not been ruled out;
- An extension of the commercial fee waiver is also likely until next April;
- The performing arts sector will receive “tens of millions” of euros in financing for small community venues and large commercial spaces for concerts.
In connection with a VAT cut, there has been increasing pressure on the government to reduce the current hospitality tax rate from its current rate of 13%, back to the 9% rate of 2018 to help save the sector, allowing outlets their prices and convincing customers to return to the industry.
Sources say there are still “some important negotiations underway” ahead of the government’s 2021 budget presentation on Tuesday, but a VAT measure is considered likely.
The extension of the commercial fee waiver at least until the end of the first quarter of 2021 is seen as the most likely outcome as a way to help businesses stay afloat.
The Dáil this week approved the payment of 600 million euros to local authorities to offset the cost of the fee waiver for quarters two and three of this year, with a decision still to be made in the fourth quarter.
Sources indicate that the exemption could apply until April 1, although there are concerns about the cost of filling this financing gap for local authorities, which are beginning to face serious deficits due to a collapse in financing and revenues.
Answering the questions of the Public Expenditure Minister Michael McGrath confirmed that he is “very concerned” about the services of local authorities due to a drop in business income, but said he wants these services to be protected.
“We are also looking at any particular needs they may have in the current year because we are concerned about services, so we want them to be protected for the rest of this year and next,” he said.
Tánaiste Leo Varadkar said in the Dáil this week that “additional funds will be needed for local authorities to cover the deficits that are emerging. It is very much in the mix for the budget.”
It may be revealed that grants of up to € 10,000 for music and theater venues will be budgeted in a program described as “a lifesaver for the industry.”
The scheme is based on a similar scheme that was included in the July stimulus, in which 5 million euros were allocated for venues and artists to receive grants to plan concerts and concerts and cover their costs if the event was canceled due to to Covid-19. restrictions.
The plan was incredibly popular and had an over-subscription of around € 10 million, garnering three times as many applicants than there were funds available.
“The package will be available to people like (live music pubs) Whelan’s, Coughlan’s, Roisin Dubh and Gleneagle, from schools and universities who want to put on a show, wedding bands, theater groups and even 3Arena.” said a government source.
The amount of funding awarded will be based on criteria such as the number of staff employed by the venue or company and their track record in live music or performances.
In addition to the above measures, before Tuesday’s budget, we know that there will be:
- No increases in income tax;
- An increase in the carbon tax;
- The continuation of the purchase aid scheme;
- Start financing 9,000 homes built directly;
- Up to € 9 billion of the budget will go to social welfare, although it is unlikely that the pandemic unemployment payment will be restored.
[ad_2]