Pat Breen
Question:243 Mr. P. Breen asked the Minister for Finance if he will defer the 1% VAT increase for hotels and restaurants until 2004; and if he will make a statement on the matter. [6967/03]
Written Answers - Tax Code.
Pat Breen
Question:244 Mr. P. Breen asked the Minister for Finance if he will remove the 2% VAT increase to help the tourism business; and if he will make a statement on the matter. [6969/03]
I propose to take Questions Nos. 243 and 244 together.
In budget 2003 I decided to raise revenue from indirect taxes and one of these changes was the increase in the reduced rate of VAT from 12.5% to 13.5% with effect from 1 January 2003. This will bring in €187 million in 2003 and €224.5 million in a full year. VAT has become one of the most significant sources of revenue for the Exchequer. This revenue raising measure was essential in order to raise Exchequer revenue for much needed public services. This change in the rate became law on budget night and is in the process of being confirmed in the Finance Bill. The removal of the 1% increase in the reduced rate of VAT for hotels and restaurants as proposed by the Deputy would require alternative revenue raising measures of similar scale or similar reductions in public expenditure. I have no plans to make any changes to the current position.