Dáil Éireann Debate, Tuesday - 4 October 2022
221. Deputy Catherine Murphy asked the Minister for Finance his plans to review the 9% VAT rate for the hospitality sector between today’s date and the expiration of the 9% rate in February 2023; and if the rate will be abolished on the last day of February 2023. [48228/22]
Amharc ar fhreagraAs the Deputy will be aware, the 9% rate for the tourism and hospitality sectors was reintroduced in Budget 2021 from 1 November 2020 to 31 December 2021 at an estimated cost of €401m. This measure was initially extended in Budget 2022 to 31 August 2022 at a further estimated cost of €251m. It was then extended again for another six months until 28 February 2023 at an additional estimated cost of €250m. This was done to provide further support to the tourism and hospitality sectors over the busy November/December period and into the early New Year.
No further extension to this measure is envisaged so the rate which applies to these sectors will revert to 13.5% from 1 March 2023.
The Deputy should note that a review was undertaken of the 9% VAT rate in advance of Budget 2019. This review found that tourism expenditure is more sensitive to income growth and the economic cycle than price changes, which reduces the relevance of the VAT rate applying to the sector.
Should the economic position or tourism demand alter, the VAT rate applicable to tourism and hospitality will be reviewed as part of the budgetary cycle.
