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

As the Deputy knows, the costing that has been put on the overall measure being extended to the end of the year is €427 million, which is a very large sum of money by any yardstick. The Deputy asked verbally and in writing about excluding hotel accommodation. I am advised by Revenue, as I set out last week in written replies to parliamentary questions, that there would be significant practical operational concerns in having different VAT rates applying to hotel accommodation and meals given how the sector operates, with various packages ranging from bed and breakfast accommodation through to all-inclusive board and lodging packages. This could lead to the underpayment of VAT because the charge for accommodation and meals would have to be apportioned. In the view of Revenue, it would undoubtedly provide opportunities for tax planning, which would be difficult to police. This would give rise to administrative and operational complexity as well as increased risk of avoidance and scope for manipulation of the VAT system. This is the view of Revenue and those are the points it made to me. I must also take account of those points when we are making a decision.

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