Michael McGrath (Cork South Central, Fianna Fail)
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193. To ask the Minister for Finance if the opening budget position for 2014 on which his budget adjustment will be based includes the continuation of the current reduced 9% rate of VAT; and if he will make a statement on the matter. [39557/13]

Michael Noonan (Limerick City, Fine Gael)
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The 9% reduced VAT rate for tourism related services was introduced in July 2011 as part of the Government Jobs Initiative as a temporary measure and is due to expire at end December 2013, at which point it will revert to 13.5%. Failure to revert the 9% rate to 13.5% gives rise to a Budget shortfall in 2014. Retaining the 9% rate, therefore, would be very costly to the Exchequer and would require an increase in taxation or reduction in expenditure elsewhere. Any proposal to maintain the 9% VAT rate will be considered in the context of the Budget.