Christopher O'Sullivan (Cork South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

74. To ask the Minister for Finance the calculations resulting in a figure of €545 million when estimating the cost of reducing VAT to 9% for food-led hospitality businesses; if he could give a full breakdown on how this figure was reached; and if he will make a statement on the matter. [28466/24]

Jack Chambers (Dublin West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am advised by Revenue that traders are not required to separately identify the VAT yield from specific activities, therefore it is not possible to estimate the cost of a VAT reduction for the food-led hospitality sector using tax information alone.

To calculate an estimate, Revenue uses both taxpayer returns and third party macro-economic data provided to Revenue by the Central Statistics Office (CSO). This data contains a detailed breakdown of Personal Consumption Expenditure across a range of expenditure items. To estimate consumption for a future year, Revenue grosses up the latest available data using a combination of CSO price indices, taxpayer returns and Department of Finance macroeconomic forecasts.

The estimated total consumption within the food services sector not subject to the 0% or 23% rate of VAT is currently estimated to be €12 billion (VAT exclusive) in 2024. The full year VAT yield by applying the reduced rate of VAT (13.5%) to this consumption is estimated at €1.6 billion. The full year VAT yield by applying the second reduced rate of VAT (9%) to this consumption is estimated to be just under €1.1 billion. The full year cost is the difference between these estimates, currently €545 million.