Tuesday, 13 May 2014

Questions (204)

Michael McGrath

Question:

204. Deputy Michael McGrath asked the Minister for Finance if the 9% VAT rate will expire at the end of 2014; if the budget projections for 2015 contained in the stability programme update assume its expiration, the cost of retaining the 9% rate in 2015; and if he will make a statement on the matter. [21221/14]

View answer

Written answers (Question to 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 Budget 2014 I announced that the 9% VAT rate would be retained at a cost of €290 million in 2014 and €350 million in a full year.  The Budget change means that the 9% rate is not due to expire, it is subject to change in the normal course of the budgetary and Finance Bill process, as with all taxes.  This is what is assumed in the stability programme update.