THE reintroduction of the nine per cent VAT rate for food businesses and hairdressers will be a significant help for hundreds of Donegal businesses, according to local Minister of State, Charlie McConalogue.
In line with the Programme for Government commitment, the nine per cent VAT rate came into effect from today, replacing the previous rate of 13.5 per cent.
“This is excellent news for the hundreds of small businesses across our county and I very much welcome the four and a half per cent reduction,” the Minister of State for Sport and Postal Policy said.
“As has been outlined by Government before, the objective of the measure is to support businesses in these services sectors who are facing increased cost pressures, and this measure is expected to support thousands of jobs in these sectors across Donegal.
“I know this was an issue before the last general election and I had a lot of engagement with local businesses owners. This measure was announced in Budget 2026 and designed to protect local jobs, boost business competitiveness, and secure the future of these services in communities across the country.”
He added: “This move by government brings Ireland’s tax rates closer to what tourists see in major holiday spots like France and Spain. After years of dealing with heavy inflation and rising costs, this VAT cut offers small businesses much-needed breathing room, improves their cash flow, and helps them stay competitive.”
The new nine per cent rate will apply to food and catering services and to hairdressing. The measure will not apply to hotel accommodation but will apply to the food and catering provided by hotels.