Sinéad Gibney (Dublin Rathdown, Social Democrats)
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967. To ask the Minister for Enterprise, Trade and Employment whether he has done any independent research or assessment on the impact of the 9% VAT for hospitality on the retention of jobs and the affordability of hospitality services; and if he will make a statement on the matter. [43890/25]

Peter Burke (Longford-Westmeath, Fine Gael)
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I understand that the Deputy is referring to the rate of VAT applied to the hospitality sector, which is currently applied at 13.5%. My Department has not commissioned an independent assessment on the impact of a VAT reduction in the manner suggested. My Department does, however, maintain regular engagement with a range of stakeholders through a variety of fora. It is clear to me that this is a key concern of the hospitality sector and that this viewpoint has been echoed to the Minister for Finance also.

With regards to wider research on this matter, the National Competitiveness and Productivity Council published ‘Ireland’s Competitiveness Challenge 2025’ earlier this month. This work examined recent patterns in insolvencies. It showed an increase in the rate of insolvencies over recent years (based on Company Registrations Office (CRO) data). Nonetheless, the number of companies registered at year-end has also continued to grow at a steady rate. Furthermore, analysis of incorporations and liquidations shows a net increase of 157 new hospitality businesses over the period January to June 2025. This data does not capture the operations of sole traders, of which there are many in the hospitality sector.

Furthermore, Revenue publish data on Self-Assessed Income Tax receipts, which shows that there has been 14% growth in Income Tax receipts over the period 2019 to 2024 in the Accommodation and Food Services Sector. However, growth remains below total growth across all sectors of 19%. It is also clear from the data that this sector was among the most impacted by the COVID-19 pandemic.

With regards to the impacts on the affordability of hospitality services, it should also be considered that VAT is borne by the consumer in the end price of goods and services. As such, a price reduction due to a decrease in the VAT rate would only occur in cases where the reduction is passed onto the consumer.

The Deputy may be interested to know that analysis of the then 9% Hospitality VAT rate was undertaken in 2018 by the Department of Finance. This analysis was entitled ‘Review of the 9% VAT Rate: Analysis of Economic and Sectoral Developments’ and was published in July 2018.

The Programme for Government (PfG) 2025: Securing Ireland’s Future sets the following commitment in relation to VAT: “The Government will bring forward measures to support SMEs, in particular the retail and hospitality sectors, acknowledging the increased cost pressures on these sectors and this will entail changes to VAT, PRSI and other measures. These measures will be implemented as part of the normal budget process.”

Ultimately, any changes to the VAT rate are a matter for the Minister for Finance, as part of the budget process.