The Government is reducing the VAT rate for food and catering businesses, and for hairdressing services from 13.5% down to 9%.
The measure will come into effect from 1 July next year, and will cost €232m for 2026 and €681m in a full year.
This VAT reduction is in line with a commitiment in the Programme for Government, with Minister for Finance Pachal Donohoe saying it will support more than 150,000 jobs across the country.
Watch: Minister Paschal Donohoe announces a VAT reduction for food and catering businesses, as well as for hairdressing services
The Irish Hairdressers Federation (IHF) welcomed the move. Spokesperson Lisa Eccles said: “We welcome the Minister’s commitment to reducing VAT within the hairdressing industry to 9%, which is indeed good news for our sector.
“However, this decision comes with a strong sting in the tail, as the measure will not take effect until July. Many politicians assured us during our meetings in the run-up to the Budget that this VAT change would become a reality, and while it is, the delay leaves our members in a precarious position.
“There are 267 days between now and July, and I fear for our members’ futures,” she said.