Cost of 9% Vat rate is €2.2bn, says tax body

The cost to the exchequer of the reduced 9% Vat level on tourism and related services since its introduction six years ago is now running at over €2.2bn and increasing the tax back to 13.5% would raise an extra €491m a year for the Government.

This is one of the findings of the Tax Strategy Group — the unit in the Department of Finance responsible for throwing light on the costs of potential budget measures by Finance Minister Paschal Donohoe — as he prepares for his first budget in October.

The documents cover all sorts of taxes and policy, including corporation tax for multinationals and business incentives for small firms, personal taxes, including the Universal Social Charge, and potential incentives for small landlords to help ease the housing crisis.