The tourism services 9% VAT rate is again under the microscope as the Government prepares its 2019 Budget.
The Department of Finance has calculated that the special 9 per cent VAT has cost €2.6 billion since its introduction in 2011, including €490 million in tax foregone last year.
In a review of the rate, which has been published on the department’s website, officials question whether the rate is still “relevant” given the booming state of the tourism sector, which is at record highs.
This view will be strengthened by to-day's Crowe report (see story below) which reveals that hotels enjoyed record turnover for a seventh consecutive year.
The rate was originally cut from 13.5 per cent in 2011 as a temporary stimulus for the sector at the height of the recession.