Catherine Martin (Dublin Rathdown, Green Party) | Oireachtas source

The Deputy has asked about the extension of the reduced 9% VAT rate for the hospitality sector. While elements of the hospitality sector are also important parts of the wider tourism ecosystem, as the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, I do not have responsibility for the general hospitality sector. However, the Minister for Enterprise Trade and Employment, Deputy Coveney, and I co-chair the hospitality and tourism forum as I said earlier, which brings together on a regular basis these two important and interrelated sectors. The Government has strongly supported the tourism and hospitality sectors through a range of physical supports, particularly during the Covid-19 period, and more recently in dealing with the challenges facing the sector.

These supports have included the retention of the lower VAT rate since November 2021, a rate which was most recently extended until 1 September 2023.

In 2021, supports from my Department included €55 million for a dedicated tourism business continuity fund, €17 million in capital investment for an outdoor dining scheme and €5 million for an urban animation scheme. In budget 2022, the Government allocated €67.6 million in additional funding for tourism of which a further €50 million was for further tourism business continuity supports.

These supports from my Department were in addition to the significant supports provided through the employment wage subsidy scheme, EWSS, and the Covid restrictions support scheme, CRSS, which were operated by the Office of the Revenue Commissioners. The Minister for Finance has responsibility for VAT rates or other taxation measures, and in assessing any proposals on such matters the balance between the costs of measures against their impact and the overall budgetary framework is a critical consideration. The most recent extension is estimated by the Department of Finance to cost €300 million.

Notwithstanding this, the Government recognises the challenging business environment within which key elements of the tourism and hospitality sectors are operating this year and the role that such businesses play in driving employment and economic activity across Ireland. That is why it was extended to 1 September.

In relation to any further extension it is clear that hotels will trade well in 2023 due to the strong demand for tourism and their role in the provision of humanitarian accommodation. I have asked my officials in Fáilte Ireland to do further work in relation to any possible mitigation measures that are needed for other tourism businesses.

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