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

As the Deputy will be aware, in making any decision on VAT rates or other taxation measures, the Government must balance the costs of the measures in question against their impact and the overall budgetary framework. In the case of the tourism and hospitality sectors, an extension of the 9% VAT rate to the end of 2023 would cost more than €500 million. However, the Government recognises the challenging business environment the tourism and hospitality sectors are operating in and the role that these businesses play in driving employment and economic activity. Their regional presence and focus was an important consideration in the decision we had to make. For this reason, I will be extending the 9% VAT rate for these sectors to the end of August 2023. It will revert to the 13.5% VAT rate on 1 September 2023. The estimated cost of this measure is €300 million. This extension strikes a balance between the cost to public finances and the provision of support for these sectors.

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