Christopher O'Sullivan (Cork South West, Fianna Fail)
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217. To ask the Minister for Finance if it is possible to publish a full calculation and breakdown of the proposed revenue generated from increasing hospitality VAT from 9% to 13.5%; and if he will make a statement on the matter. [4757/24]

Michael McGrath (Cork South Central, Fianna Fail)
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I am advised by Revenue that traders are not required to identify the VAT yield generated from the supply of specific goods and services on their VAT returns. Therefore, it is not possible to provide the VAT yield on specific products and services using taxpayer information alone. However, using a number of third-party data sources, a tentative estimate of the additional VAT revenue in €m on these services is set out in the table below.

Pearse Doherty (Donegal, Sinn Fein)
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218. To ask the Minister for Finance the estimated cost of reducing the rate of VAT applying to the hospitality and tourism sectors from 13.5 to 9% to end-2024 and in full-year terms, respectively. [4835/24]

Michael McGrath (Cork South Central, Fianna Fail)
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Revenue have indicated that the estimated cost of reducing the VAT rate from 13.5% to 9% for the tourism and hospitality sectors will be in the region of €653m from March to December 2024 and €764m in full-year terms from January to December 2024.

Pearse Doherty (Donegal, Sinn Fein)
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219. To ask the Minister for Finance the estimated cost of reducing the rate of VAT applying to the hospitality and tourism sectors from 13.5% to 9% excluding hotel and other accommodation, to end-2024 and in full-year terms, respectively. [4837/24]

Michael McGrath (Cork South Central, Fianna Fail)
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Revenue have indicated that the estimated cost of reducing the VAT rate from 13.5% to 9% for the tourism and hospitality sectors excluding hotel and other accommodation will be in the region of €514m for the period March to December 2024 and €604m in full-year terms from January to December 2024.

Michael McGrath (Cork South Central, Fianna Fail)
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I am aware that Oxfam International recently (on January 15th 2024) produced a new report regarding global wealth inequality entitled “Inequality Inc.”, as well as Oxfam Ireland’s related press release from the same day. The Government continues to address wealth inequality through our progressive tax and social transfers system.

At present, Ireland’s top marginal rate of tax is 52 per cent for employees and 55 per cent for self-employed. Therefore, to introduce an additional higher rate of income tax would have the effect of further increasing the top marginal tax rates. It is important to point out that high marginal tax rates can create a strong disincentive to work and could also cause harm to our international competitiveness and make Ireland a less attractive place for investment.

Multinational enterprises provide our economy with high value jobs and substantial revenues across all taxes, including income tax, which are critical to the provision of public services. As the Deputy will be aware, considerable progress has been made in recent years to restore our economy, and this cannot be taken for granted, particularly given the challenges in the international arena that confront us at present.

Ireland is known to have one of the most progressive systems of taxes and social transfers of any EU or OECD country. This has been acknowledged by the IMF, the OECD and the ESRI. These systems contribute to the redistribution of income and to the reduction of income inequality in Ireland. A progressive tax system ensures that the burden of taxation falls most heavily on those with a higher ability to pay.

The Government also takes action against inequality through our tax and welfare system. For instance, the strong redistributive role of the Irish tax and welfare system is evident in the range of supports that were introduced to help mitigate the impact of the Covid-19 pandemic and in the series of measures designed to limit the impact of the current cost of living pressures.

In 2024 it is projected that the top one per cent of taxpayer units, approximately 34,000 taxpayer units, who are those with annual income in excess of €290,000, will pay just over 24 per cent of total Income Tax and USC. This is a very large proportion of the total Income Tax and USC take from such a small cohort of taxpayers. In comparison, 80 per cent of taxpayer units, which is the cohort of income earners with annual income of less than €69,500 and account for about 2.74 million taxpayer units, will pay 21 per cent of total Income Tax and USC.