The government hopes a drop in the hospitality VAT rate will lead to price cuts for customers.
That's according Minister of State at the Department of Tourism, Alan Dillon.
The hospitality VAT rate is due to split on Wednesday, 1 July becoming nine per cent (9%) for restaurants, catering services, and hairdressing services, but remaining at 13.5% for accommodation charges.
Ireland’s hospitality VAT rate has fluctuated between 9 and 13.5% over the past 15 years, as economic crises have come and gone.
Following the Euro crisis, it was reduced to 9% to stimulate the industry.
It reverted to the standard 13.5% rate in January 2019.
Between November 2020 and August 2023, it was cut back to 9% as a temporary Covid-19 business relief.
Then, in September 2023, it reverted to 13.5%
On Wednesday, a targeted reductions for food-led services, excluding alcohol, will be set at 9%, with no scheduled expiry date.
Junior minister Dillon says he's hopeful the VAT rate drop for hospitality will lead to price cuts for customers:
