Jack Chambers (Dublin West, Fianna Fail) | Oireachtas source

I appreciate Deputy O'Sullivan raising this issue and his contributions today. We all know the real importance of the hospitality sector, which is, as the Deputy has stated, a very significant employer across the country, in our cities and towns, as well as in many rural communities. It is a sector where job opportunities exist, ranging from part-time to full-time roles. I am also conscious that it can be a challenging sector to operate within.

The Government obviously wants to maintain a healthy and profitable environment for the sector but, in making any decision on VAT or other taxation measures, the Government must balance the cost of the measures in question with their impact on the overall budgetary framework. I will refer to an initiative of the Minister for Finance, Deputy McGrath. On 17 January, he announced that he has been engaging with the Revenue Commissioners on the development of a proposal to introduce further flexibility to the tax debt warehousing scheme. Further information will be outlined soon but it is the Minister's intention to introduce enhanced flexibility to support viable businesses. To this end, he advised that the Government was looking at issues around repayment arrangements and the interest rate that will apply. Revenue has indicated that it will be flexible as regards payment plans for warehoused debt and will work with businesses in the scheme so that they can secure their viability into the future.

As I have already indicated, the cost of applying the 9% rate to food items in the hospitality sector would amount to €570 million in a full year and €470 million from 1 March of this year to the end of the year. Such a decision would have significant consequences, as it would provide support for some businesses and not others while further limiting the Government's options in the future by reducing the overall budget available for other measures. I will reflect the Deputy's contribution on this Topical Issue to the Minister, Deputy McGrath.

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