Brendan Griffin (Kerry, Fine Gael)
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296. To ask the Minister for Finance his options in respect of a reduction of the 13% VAT rate currently applicable to the hospitality sector; if he cannot lower this rate below 5%; if that is the case, the reason therefor; if he has had contact with the European Commission regarding potential VAT reductions in the economy; and if he will make a statement on the matter. [15165/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In general, the reduced rate of VAT (13.5%) currently applies to accommodation, certain recreational activities and supplies of food and drink in restaurants, excluding alcohol and soft drinks.

Under EU VAT law, Member States may only have two reduced rates which cannot be higher than 15% and no lower than 5%. These lower rates can only be applied to a prescribed list of services in Annex III of the VAT Directive 2006/112/EC. Ireland currently has two reduced rates, 9% and 13.5%. In order to introduce a new reduced rate, one of the current reduced rates would have to be removed. In general, the VAT rate on accommodation, certain recreational services, such as amusement parks, fairgrounds, cinemas, etc., can be reduced to a rate no lower than 5%. The provision of food and drink in restaurants can also be reduced to a rate no lower than 5%, with the possibility to excluding alcohol and soft drinks.

Ireland, in line with the VAT Directive, also maintains several standstill provisions and derogations that allows it to maintain reduced rates, zero rates and exemptions to certain supplies for historical reasons. These standstill provisions and derogations cannot be extended.

Brendan Griffin (Kerry, Fine Gael)
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297. To ask the Minister for Finance the amounts generated by the 23% VAT rate in each year since 2012, in tabular form; if he has considered reducing the rate in order to stimulate businesses, particularly in the retail sector; and if he will make a statement on the matter. [15166/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that VAT registered traders are not required to separately identify the VAT generated from a particular activity or product type on their VAT returns. However, using Revenue and other third-party data, an estimate of the VAT generated at the standard rate (currently 23%) for the years 2012 to 2019 is provided below.

Information in relation to the effect of a VAT rate change on receipts is available on page 25 in the Revenue Ready Reckoner at link which the Deputy may be interested in:

www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.

The Government is fully aware of the unprecedented impact that the coronavirus is having on business and people’s livelihoods. In this regard a range of measures have been introduced to provide income support to those who need it while also giving confidence to employers to retain the link with employees so that when this crisis passes our people can get back to work as quickly and seamlessly as possible.

In addition to current support measures, my officials are examining a range of possible measures to ensure that the economy is in a position to recover rapidly while maintaining a stable tax base.