Department of Finance officials advised against introducing different VAT rates for the hospitality sector in the Budget 2025, due to concerns related to tax avoidance and operational complexities.
Briefing documents addressed to Finance Minister Jack Chambers outlined the potential difficulties operators would face with multiple VAT rates, as some establishments offer both accommodation and meals.
Estimates from the department suggested that a reduction in the VAT rate to 9% for the entire sector could cost €764m annually, with a lower estimate of €545m if limited to food and catering services.
Then Enterprise Minister Peter Burke recommended a 9pc% VAT rate for hospitality to support smaller operators and proposed a decrease in excise tax on beer, which would reduce the tax on a pint of stout from 60c to 55c. Mr Burke is now minister for tourism.
The issue wil be discussed on RTE1 Irish language current affairs programme Fóram this morning, in a studio interview with Travel Extra editor Eoghan Corry.
