29 Jun 2022

Reduced VAT rate for hospitality set to continue

Reduced VAT rate for hospitality set to continue

The lower VAT rate for the hospitality sector “will be brought back up” but in a way that “doesn’t adversely hit the industry”, Minister for Transport Eamon Ryan said.

The hospitality sector has a VAT rate of 9%, which is due to expire in August.

Green Party leader Mr Ryan, who spoke on his way to Cabinet on Tuesday morning, said the rate will not be hiked ahead of the “dark winter” – a “difficult” time for hospitality.

“We don’t want to change it then,” he said.

“So I think it will be timed in a way that gives the hospitality sector the best chance to get back on its feet.”

The rate was reduced from 13.5% on November 1 2020, with the aim of helping businesses under financial pressure due to pandemic-related restrictions.

It was extended during this year’s Budget to the end of August, despite businesses asking for it to be extended further to help them recover from lockdown losses.

“We do need to get through this period where the Covid supports start to end, and hospitality are the ones most affected by Covid,” Mr Ryan said.

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