Posted online: Aug 29th, 2008

By Dermot Keys
dermot@letterkennypost.com
The news that workers in the hospitality industry in Donegal will be taxed on service charges has been dismissed as a cynical move by the government to target vulnerable workers by a SIPTU spokesperson.
The new tax will come into effect as of September 1 and although tips will remain tax exempt, the concession on service charges that are distributed to staff will be withdrawn. The concession that previously applied to service charges was designed to ensure that staff received gratuities that were intended for them.
While there is a perception that there is no difference between tips and service charges, charges tend to be compulsory and are included on a customer’s bill.
SIPTU Branch Organiser for Donegal, Martin O’Rourke, told the Letterkenny Post that it was unfair to tax these extras, which many employees rely upon to top up their existing wages.
“It’s going to hit the most vulnerable in society,” he said, pointing out that the basic wage of workers in the service industry tended to be just above the minimum wage.
“A lot of migrant workers and students work in the hotel industry and I think it is no accident that these are the people who are being targeted by the government.”
He argued that it was unfair to target those in the lower wage brackets when making changes to the existing tax system.
“SIPTU are fighting this tooth and nail as we believe that it is unfair to the people working in the hospitality industry. It’s a cynical move by the government to target people who they believe do not have an effective voice.”
The new laws are likely to have a major impact on workers in Letterkenny and Donegal due to the large amount of people who are employed in the hospitality sector. The absence of a major industry in the county has led to a reliance on the service sector for employment opportunities.