Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

As the Deputy is aware, at present the 9% rate applies on a temporary basis to the hospitality and tourism sectors until the end of February. The 9% rate was introduced in recognition of the fact that the tourism and hospitality sectors were among those most impacted by the public health restrictions put in place throughout the pandemic. Through no fault of their own, bars, hotels and restaurants among others had to close on multiple occasions in response to the public health crisis. The measure initially ran from 1 November 2020 to 31 December 2021 at a cost of €401 million. It was then extended to 31 August 2022 at a cost of an additional €251 million, and a further extension was announced in budget 2023, bringing the total cost to over €900 million to the end of February 2023. This represents very substantial support by the Government to the hospitality and tourism-related sector.

As set out in budget 2023, from 1 March 2023 these sectors are due to return to the 13.5% rate. The budgetary position for 2023 is constructed on this basis. The estimated cost for extending the current measure to the end of the year is €427 million. This can be broken down into estimated figures of €326 million for hospitality and €101 million for accommodation. As I have said on a number of occasions, the Government will, in the coming weeks, examine the full suite of taxation and other measures that are due to expire at the end of February. In making any decision, the Government will balance the costs of the measures in question against their impact and the overall budgetary framework. It should be noted that other supports have been put in place which are also of assistance to the sector, including the new temporary business energy support scheme. This scheme is aimed at businesses whose average unit gas or electricity price has risen by over 50% compared with their average unit gas or electricity price in 2021.

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