By Michelle Crean

Finance Minister Michael McGrath has this week said that the Government will, in the coming weeks, examine the 9% VAT rate.

Minister McGrath was speaking in the Dáil when asked by Kerry TD Brendan Griffin, as well as a number of other TDs from across the country, to retain the 9% VAT rate for the tourism and hospitality sectors.

Fine Gael's Brendan Griffin questioned if the VAT rate would stay the same or be changed.

"To ask the Minister for Finance if he will retain the 9% VAT rate for the tourism and hospitality sector; if his attention has been drawn to reports of the vital importance of this measure for counties such as Kerry, which has a proportionately higher reliance on the tourism and hospitality sectors; and if he will make a statement on the matter".

Minister McGrath said that he'd take all the questions together.

"The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT. Ireland currently operates two reduced rates of VAT, 13.5% and 9%, as permitted by the Directive," he answered.

"Currently, the 9% rate applies on a temporary basis to the hospitality and tourism sectors which includes the supply of hotel accommodation and the supply of meals in hotels (excluding alcohol and soft drinks) until 28 February 2023. The 9% rate was introduced in recognition of the fact that the tourism and hospitality sectors were among those most impacted by the public health restrictions put in place throughout the pandemic. Through no fault of their own, bars, hotels and restaurants had to close on multiple occasions in response to the public health crisis. From 1 March 2023, these sectors are due to return to the 13.5% rate. The supply of alcohol and soft drinks remains unchanged at the standard rate of VAT (23%). As I have said on a number of occasions, the Government will, in the coming weeks, examine the full suite of taxation and other measures that are due to expire at the end of February. In making any decision the Government will balance the costs of the measures in question against their impact."