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

It is important to give certainty to the sector. It is appropriate we have a transition to the restoration of the rate on 1 September. There was considerable debate and speculation and it would have been challenging for many businesses that are dealing with increased energy and other costs and grappling with remaining competitive and keeping their doors open. I was very conscious of that. I was conscious also that putting it up would have resulted in some prices going up. VAT is a consumer tax. It is the last item that goes on the bill or invoice, so it is a tax on consumers. We are trying to get inflation down and it is a sector that is jobs-rich throughout the country. Taking all that into account I felt, and the Government felt on my recommendation, that a six-month transition to the restoration of the 13.5% rate was the appropriate action. I have no doubt the debate will continue but as I said earlier it is important I, as Minister, provide clarity and certainty to the sector that the rate will return to 13.5% on 1 September.

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