Cathal Crowe (Clare, Fianna Fail)
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116. To ask the Minister for Finance if he will extend the 9% rate of VAT applicable to the tourism and hospitality sectors beyond 28 February 2023; and if he will make a statement on the matter. [55648/22]

John Lahart (Dublin South West, Fianna Fail)
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145. To ask the Minister for Finance if he has considered the implications to the sustainability of the hospitality sector given the increase of VAT to 13.5%; and if he will make a statement on the matter. [55757/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 116 and 145 together.

As the Deputies will be aware, the 9% rate for the tourism and hospitality sectors was reintroduced in Budget 2021 from 1 November 2020 to 31 December 2021 at an estimated cost of €401m. This measure was initially extended in Budget 2022 to 31 August 2022 at a further estimated cost of €251m. It was then extended again for another six months until 28 February 2023 at an additional estimated cost of €250m. This was done to provide further support to the tourism and hospitality sectors over the busy November/December period and into the early New Year.

No further extension to this measure is envisaged so the rate which applies to these sectors will revert to 13.5% from 1 March 2023.

The Deputies should note that a review was undertaken of the 9% VAT rate in advance of Budget 2019. This review found that tourism expenditure is more sensitive to income growth and the economic cycle than price changes, which reduces the relevance of the VAT rate applying to the sector.

Should the economic position or tourism demand alter, the VAT rate applicable to tourism and hospitality will be reviewed as part of the budgetary cycle.