VAT Rates Reductions

Dáil Éireann Debate, Tuesday - 24 September 2013

Tuesday, 24 September 2013

Ceisteanna (184, 205)

Jim Daly

Ceist:

184. Deputy Jim Daly asked the Minister for Finance his plans for the future of the 9% VAT rate currently applicable to the services and hospitality sector; and if he will make a statement on the matter. [39371/13]

Terence Flanagan

Ceist:

205. Deputy Terence Flanagan asked the Minister for Finance if he will keep the 9% VAT rate for the tourism industry in budget 2014; and if he will make a statement on the matter. [39633/13]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 158, 184 and 205 together.

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.