Conamara Cafe Owner Warns VAT Cut Won’t Offset Rising Costs

UPDATE: The owner of a café in Conamara warns that the upcoming VAT reduction in July 2026 will do little to alleviate the financial pressures facing small businesses. Diarmuid Ó Mathúna, proprietor of Pota café, stated that while he anticipates savings of only €7,000 over the year, his costs from rising minimum wage and pension payments will soar by around €14,000.

Ó Mathúna expressed frustration, saying, “We won’t be able to pass this cut on VAT onto customers as other costs have risen. I will be worse off.” The café, which thrives during the summer, struggles to find long-term staff and must often rely on seasonal workers, complicating operational stability.

Tourism has also seen a downturn, with Fáilte Ireland reporting fewer visitors to Conamara. Ó Mathúna noted a significant drop in American tourists, attributing this decline to factors like geopolitical tensions and economic conditions. He remarked, “Whether it’s because of Israel and Palestine or Trump’s relationship with Ireland, there has been a reduction in tourists from America.”

The café owner highlighted that rising accommodation costs make the region less competitive, further straining local businesses. Cash flow remains a challenge during the off-peak months of January and February, with a rebound only expected around the Easter holidays.

Despite these challenges, Ó Mathúna appreciates the government’s decision to reduce VAT, stating, “These are exceptional times, and there are so many more challenges now than there was once, even since Covid.” He hopes that the VAT cut will instill confidence in businesses to endure tough times ahead.

As the hospitality sector braces for the upcoming VAT changes, small business owners like Ó Mathúna continue to face a complex web of financial pressures. The situation remains fluid, with ongoing developments expected as the VAT cut approaches.

Stay tuned for further updates on this evolving story as the impact on local businesses continues to unfold.