VAT Rate Reductions

Dáil Éireann Debate, Wednesday - 2 October 2013

Wednesday, 2 October 2013

Questions (126)

Tom Fleming

Question:

126. Deputy Tom Fleming asked the Minister for Finance in view of the decision to reduce the VAT rate from 13% to 9% and the significance of this reduction to the tourism sector in County Kerry and throughout the country and the very positive implications it has had on the industry in creating and maintaining jobs and giving value for money, if he will support the calls to keep the VAT rate at 9% and ensure that Ireland has a strong and competitive tourism industry going forward; and if he will make a statement on the matter. [41372/13]

Written answers

Minister for Finance

The 9% reduced VAT rate for tourism related services was introduced in July 2011 as part of the Government Jobs Initiative. The measure was designed to boost tourism and create additional jobs in that sector. In line with best international practice it was introduced as a temporary measure and is due to expire at end December 2013, at which point it will revert to 13.5%. Retaining the 9% rate would be very costly to the Exchequer and would require an increase in taxation or reduction in expenditure elsewhere. Any proposal to maintain the 9% VAT rate will be considered in the context of the Budget.