asked the Minister for Finance if he will indicate the approximate amount of revenue on VAT which was forfeited to the Exchequer as a result of the reduction of VAT on hotel charges which was introduced in 1985; and if he will make a statement on the matter.
Written Answers. - Tax Relief Cost.
41.
As VAT statistics are not compiled on a business sector basis, the information requested by the Deputy is not available from the records of the Revenue Commissioners. However, information based on statistics from non-Revenue sources can be supplied.
On that basis, it is estimated that the cost to the Exchequer of reducing VAT on hotel accommodation from 18 to 10 per cent, with effect from 1 March 1985, was approximately £4 million in 1985 and £6 million in a full year. The primary aim of the reduction in rate was to assist in improving the competitive position of VAT registered businesses in the tourism industry.