The 9% VAT rate for the hospitality sector including pubs and restaurants looks set to be extended under plans to be approved by Cabinet.
The measure was due to expire at the end of August, and it understood that Finance Minister Paschal Donohoe discussed the matter with coalition leaders on Monday night.
He is set to bring a memo to Cabinet this morning outlining the details of the extension.
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The lower rate was introduced following intense lobbying from the hospitality and restaurants sectors in 2021, when the country was in the grips of the COVID-19 pandemic.
The reduction applies to services such as catering and restaurants, tourist accommodation, cinemas, theatres, museums, historic houses, open farms, amusement parks and hairdressing.
Groups representing the sector welcomed the move.
Adrian Cummins of the Restaurants Association said “it will help businesses ahead of a difficult tourism season.”
He said: “Our Association will be advocating for a continuation of the 9% vat rate to the end of 2023 at least."
The new planned expiry date for the reduced rate is not currently known.
In response to a parliamentary question last week, minister Donohoe said Revenue informed him that the estimated cost of extending the 9% rate for the entirety of 2023 would be in the region of €500 million.
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