Brexit will pose the hospitality industry's "most immediate threat", according to the Restaurants Association of Ireland (RAI).

The Government collected less than it anticipated in Vat and in corporate tax receipts last month but finance officials said revenues were still on course to meet the budget targets by the end of the year.

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.

The country’s main tourism industry group has warned any UK recession sparked by the Brexit vote will inevitably directly hit Ireland as it urged the Government to make the reduced Vat rate tax an untouchable part of the tax code here.