Consumers urged to monitor cuts
CONSUMERS are being urged to police price reductions on foot of the VAT rate being slashed from 13.5pc to 9pc.
The Government admitted it could not force businesses to reduce prices to customers. But restaurants and hotel owners were warned if there was evidence the benefit was not being passed on to the consumer, the tax could be hiked up again in 18 months' time.
The reduction in the VAT rate is expected to see better deals offered in hotels, restaurants, pubs and leisure facilities. It should also result in lower prices across a range of other areas, although it does not apply to the sale of alcohol or soft drinks.
Taoiseach Enda Kenny said it was essential the tourism industry passed on the cuts to customers.
Speaking in Killarney, he said businesses that didn't pass on the VAT cuts to customers were letting the country down.
"Kerry interests tell me that the VAT reduction here in Killarney alone is worth about €10m over the course of one year," he said.
"One hotelier rang me last week and said this was worth €2,500 to him every week and that he was passing it on to the consumers. That's what we want to see."
A survey of tourist businesses conducted yesterday found that most were passing on the 4.5pc VAT cut to customers.
Restaurants, cinemas and golf clubs were among those to immediately drop their prices -- some by over 20pc.