The 9% VAT rate for the hospitality sector is to be extended under plans to be approved by Cabinet this morning.
The measure was due to expire at the end of August.
Finance Minister Paschal Donohoe discussed the matter with coalition party leaders last night.
Confirmed: the 9% VAT rate for hospitality will remain in place for the next 6months. It runs out on the Feb 28th 2023 and will the state cost €250million pic.twitter.com/iGXRzm5Vu8
— Mairéad Cleary (@maireadcleary7) May 10, 2022
Minister for Finance Paschal Donohoe will bring what is termed an "under the arm" memo outlining the details of the extension to the cabinet this morning
It is not clear for how long the extension to the reduced rate of VAT will remain in place but there is speculation it could remain until the end of the year.
The lower rate was introduced following intense lobbying from the hospitality and restaurants sectors in 2020 when the country was in the grips of the Covid pandemic.
The measure was also extended by the government in the budget in 2021
It is anticipated that extending the 9% rate until the end of the year would cost in the region of €200m to €250m.
Speaking on his way into Cabinet, Transport Minister Eamon Ryan says it will come to an end eventually, but not after the Summer:
"We do need to get through this period where the Covid supports starts to end, and the hospitality is the most affected by Covid.
"And at the same time when you go into the dark winter and its difficult for hospitality we don't want to change it then."
