Budget 2021 provided for a reduction in the rate of VAT from 13.5% to 9% for Hospitality and Tourism related services and goods. This was a temporary measure to provide support for 14 months from 1 November 2020 to the end 2021. The measure is being extended to 31 August 2022 in recognition of the continuing challenges facing the Hospitality and Tourism sector.
While temporary, this measure will still provide support for a further 8 months to 1 September 2022, the end of the 2022 summer season, allowing for a longer period of recovery for the sector. It exists alongside other measures and will directly support businesses and jobs.
Given the scarcity of resources available to the government when looking at potential support measures, and in the context of future uncertainty, this remains a temporary measure. My Department and Revenue will continue to monitor the impact and need of this reduction on an on-going basis along with the other support measures put in place.