Robert Troy (Longford-Westmeath, Fianna Fail)
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111. To ask the Minister for Finance if his Department or a body under its aegis has undertaken any analysis of the return on investment to the Exchequer of the introduction of the special 9% VAT rate; if so, the analysis undertaken and its findings; and if his Department has estimates for the direct loss in revenues as a result of the reduced VAT rate on these services. [23264/16]

Michael Noonan (Limerick City, Fine Gael)
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The 9% reduced VAT rate was introduced as part of the Government Jobs Initiative, for the period 1 July 2011 to 31 December 2013 in respect of tourism related services, including hotel and holiday accommodation; various entertainment services; the use of sporting facilities; hairdressing services; and printed matter such as maps, brochures and newspapers.

The tourism sector is a key sector in the Irish Economy and the measure was aimed at reducing costs during a very challenging time for the sector. The objective was to boost tourism and create additional jobs. While the VAT rate was due to revert to 13.5% in 2014, it was decided to retain the 9% rate on tourism activity in Budget 2014 because the initiative had proved to be a major success, helping create over 15,000 new jobs at that time, as well as protecting existing jobs. This decision was informed by statistics on VAT and tourism by the Revenue Commissioners and the Central Statistics Office, as well as a Report undertaken by my Department entitled "Measuring the impact of the Jobs Initiative: Was the VAT reduction passed on and were jobs created?", published by the Department of Finance in November 2012 with the Department's Medium-Term Fiscal Statement.

In my last Budget I did not make any changes to the rate, stating that while the case for retaining the measure for the hotel sector in Dublin is diminishing each year, with room rates rising particularly during major events, the case for retention of the measure for the rest of the country remains. The Government, in the Programme for Partnership Government, has committed to increasing revenue from overseas visitors, growing employment in the tourism sector and increasing the number of visits to Ireland, through the retention of the 9% VAT rate on tourism related services, among other measures, providing that prices remain competitive.

Various reports on the 9% rate have been undertaken by third parties since its introduced, these have been analysed by my Department, in addition to updated statistics on VAT receipts, tourism related employment levels, hotel occupancy and international and EU comparisons, among other indicators. 

The Revenue Commissioners most recent estimated cost to the Exchequer of the reduced 9% VAT rate, since its introduction in 2011 to end 2015 is €2.1 billion.