Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As the Deputy will be aware, in making any decision in relation to VAT rates or other taxation measures, the Government must balance the costs of the measures in question against their impact and the overall budgetary framework. In the case of the VAT reductions covering hairdressing, tourism and hospitality sectors an extension of the 9% VAT rate to the end of 2023 would cost over €500m.

However, the Government recognises the role that these businesses play in driving employment and economic activity across Ireland as well as the fact that they continue to need a level of support.

For this reason I will be extending the 9% VAT rate for these sectors, including hairdressing, to 31 August 2023. It will revert to the 13.5% VAT rate on 1 September 2023. The estimated cost of this measure is €300m. This extension strikes a balance between the cost to public finances and the provision of support for these sectors.