Drinks industry chiefs have called on the government to slash the VAT rate for alcohol as, bars, hotels and restaurants across the country reopen.
Pubs welcomed customers once again for the first time in months as Phase Three of reopening the country kicked in.
However due to social distancing guidelines they must follow strict new rules to service if they are to open their doors once again.
Now the Licensed Vintners Association (LVA), the Vintners Federation of Ireland (VFI), and the Ibec representative group Drinks Ireland is calling for a reduction in the hospitality VAT rate.
And the group which represents over 5,000 pubs want the government to apply the reduced tax rate to alcohol sales in pubs and bars, until December 31, 2020.
Donall O’Keeffe, CEO, LVA said current government restrictions mean the industry will be adversely affected by the Covid-19 crisis in the coming months as they operate at reduced capacity.
Mr O'Keeffe said: " This unprecedented crisis has, and will continue to have, a devastating impact on Ireland’s drinks and hospitality industry.
"Pubs in particular have been severely impacted and will continue to be challenged given the restrictions required, including social distancing and time-limits on customer visits.
"Most will reopen over the course of the next number of weeks, but others will remain permanently closed.
"We were among the first sectors to close on 15 March. We are among the last to reopen with many pubs still not permitted to reopen until 20 July.
"We will do so under very unique circumstances, completely at odds with what it means to enjoy our culture and heritage in the pub.
"We have had to completely change our business model and the VAT model should change to reflect our new reality.
"Government guidelines mean we will operate at 50% capacity or less, yet our VAT burden currently remains the same - this is inequitable and should change, similar to measures taken on VAT in other EU countries.
"Our VAT rate on alcohol is significantly higher than EU averages.
"It is our strong view that a temporary reduction and extension of the hospitality VAT rate to alcohol sales in the on-trade, until 31 December 2020 should be implemented. This will provide tangible support and show solidarity with this industry. This is about businesses surviving."
VFI Chief Executive Padraig Cribben added that an amended European Directive makes it possible to apply a lower VAT rate on on-trade alcohol, which he claims is "a fact unknown to many".
He said: "VAT relief on alcohol sold for on-trade consumption is an incentive for pubs, as businesses, to reopen.
"VAT matters to businesses and this is about giving them a cash injection. Such a measure would generate immediate support, allowing businesses to trade through the reopening period and maintain jobs until trade picks up,"
