The Irish Hairdressers Federation has called for the retention of the 9% VAT rate for the sector ahead of its planned rise in the coming weeks.
The rate is due to increase to 13.5% on 1 March.
The federation said hair salons have seen their costs rise dramatically in the past year and the VAT increase will “ruin” them.
It said the increase will mean prices may have to go up, which it said will result in fewer customers.
IHF president Danielle Kennedy said it comes at a time when salons are struggling to get back on their feet after the pandemic restrictions.
“For example, electricity costs have doubled in many cases from two years ago, which is already killing off hair salons,” she said.
Ms Kennedy said there were 25,000 people employed in the sector and the Government’s decision to increase the rate at this time makes no sense.
“You have to question if the Minister [for Finance] is in touch with reality as it makes no sense for the Government to be doing this at a time when small businesses are struggling more than ever,” she said.
Ms Kennedy added that Government policy cannot “continually reward large multinational companies while increasing costs for small businesses which employ people in their communities”.
IHF vice president Lisa Eccles said the rise will lead to a loss of jobs in the sector as salons will be forced to close.
Lisa Eccles said the increase in costs will be passed on to customers
Speaking to RTÉ’s Drivetime, she said that the 9% VAT rate has been “essential in helping salons”.
Ms Eccles added: “The last couple of years have been really difficult for our industry as we all know.
“We were closed for huge portions of time, up to ten months over the last couple of years and we’re just trying to get back on an even keel now.”
She said that there is “no way that businesses can absorb” the increase in VAT and it will be passed on to customers.