Mattie McGrath: VAT change 'too little, too late' for businesses

Mattie McGrath criticised recent VAT rate changes, calling the rise to "13 and a half" a panic reaction and saying it comes too late to help affected businesses. He argued the rate should have been cut to 5 percent months earlier and urged equal treatment for service sectors such as hairdressers and beauty salons.

Reaction to VAT change

McGrath said the decision to restore VAT to "13 and a half" should have been handled differently, arguing it would have been better to raise it by "one or two" rather than to the full level. He described the move as a "panic reaction, knee jack reaction" and said the reduction should have been implemented six months earlier and cut to 5 percent - as it did throughout Europe - to support reopening.

Impact on closed businesses

He highlighted that businesses which were closed by the state received a temporary cut but now cannot reclaim the VAT, leaving them worse off. McGrath warned this timing harms firms that have already shut and struggles their ability to recover and reopen.

Call for parity across service industries

McGrath urged that hairdressers and beauty salons be treated the same as other sectors and listed a wide range of services affected by the decision. He referenced hotels, musicians and the wider wedding and events supply chain - stressing the interconnected nature of these industries.

Assessment of the measure

Summing up, McGrath characterised the policy as "too little, too late" and reiterated his view that a 5 percent rate would have done more to help businesses get "back on their knees and get the doors opened again."