Budget 2026 VAT Cut to 9% a Lifeline for Small Businesses – O’Shea

Budget 2026’s VAT rate cut for small businesses will protect regional jobs and improve cashflow for restaurants, coffee shops and hairdressers that have been under growing financial pressure, Fine Gael TD for Cork North West John Paul O’Shea has said.

Deputy O’Shea said today’s permanent VAT reduction from 13.5% to 9% provides long-term certainty for local businesses and the communities they serve. “This VAT reduction is a clear statement of confidence in our small and medium-sized enterprises, which are the backbone of our economy. The cut, which takes effect next year, will make it easier for local businesses to grow, remain competitive, and sustain and create jobs.”

Deputy O’Shea added “I have long advocated for measures to ease the cost pressures faced by small businesses, especially in our rural towns and villages. These enterprises employ over 191,000 people nationwide, with three-quarters of them having fewer than ten employees. This change will be felt directly on the ground — by our family-run shops, cafés, trades, and service providers who have weathered challenging times. It gives them the breathing space they need to reinvest, innovate, and expand.”

Deputy O’Shea said he was particularly pleased that the voices of small business owners had been listened to in the preparation of this year’s Budget. “The measures introduced reflect many of the priorities raised by the hundreds of businesses I’ve engaged with across my constituency and beyond. This VAT cut will make a real and positive difference for small and medium enterprises across the country.”

Deputy O’Shea concluded by saying “Supporting our SME’s means supporting jobs, innovation, and local communities. Fine Gael pledged to reduce VAT on food and hospitality services in the last general election, and it’s encouraging to see that commitment honoured in Government policy today. I will continue to work closely with business groups and local chambers to ensure that the benefits of this VAT reduction are fully realised nationwide — and especially in rural Ireland. At a time of ongoing economic uncertainty, protecting local economies and our workforce must remain a key priority.”