Planning for the upcoming Budget includes a total of €1.5 billion allocated for tax cuts in the next year. A significant portion of this, amounting to €1 billion, is designated for reducing VAT rates for restaurants, bars, and cafes. As a result, this could severely restrict the available funds for income tax reductions, potentially disadvantaging workers who were expecting cuts in their income tax.
The Budget is currently earmarked for €1.5 billion in tax cuts next year, but reducing VAT for the hospitality sector could consume €1 billion of that allocation.
If the proposed lower VAT rate for hospitality is implemented, there may be limited capacity for income tax cuts, negatively impacting workers.
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