Hoteliers defend low 9% Vat level

Hoteliers have defended the €626m-a-year cost to the exchequer of retaining the low, 9% Vat level for hospitality, saying the buoyancy in tax revenues from the additional jobs and business is making up for the lost tax revenue.

The 9% Vat tax for hoteliers and restaurants, which former finance minister, Michael Noonan, cut from 13.5% to help boost jobs at the depth of the financial crisis, has come under the spotlight, because of its high cost and the prices of hotel accommodation in Dublin and other cities tapping a tourism boom.

A year ago, the Department of Finance said the Revenue estimated that reverting back to the 13.5% rate would bring in extra revenue of €626m. The estimated cost, since its introduction in 2011, to the end of 2015, was €2.1bn.