As the Deputy will be aware, in making any decision in relation to VAT rates or other taxation measures, the Government must balance the costs of the measures in question against their impact and the overall budgetary framework. In the case of the tourism and hospitality sectors an extension of the 9% VAT rate to the end of 2023 would cost over €500m.
However, Government recognises the challenging business environment the tourism and hospitality sectors are operating in and the role that these businesses play in driving employment and economic activity across Ireland.
For this reason I will be extending the 9% VAT rate for these sectors to 31 August 2023. It will revert to the 13.5% VAT rate on 1 September 2023. The estimated cost of this measure is €300m. This extension strikes a balance between the cost to public finances and the provision of support for these sectors.