Reducing Vat rate a blunt and costly policy instrument for hospitality 

The sector was subject to the lower Vat rate of 9%  from 2011 to 2018, and again from late 2020 to mid-2023 at an estimated cost of €3.6bn

The sector has identified high energy costs, softening demand, labour market challenges, increased cost of inputs, and a lack of hotel capacity as the main challenges facing the industry and the rationale for a return to the 9% VAT rate.

Less than a week on from its publication, one of the fundamental assumptions underpinning the summer economic statement has changed with the agreement of the EU-US trade deal. This will have implications for October’s budget and a potential reduction in the overall budgetary package outlined by the Government just a week ago.

Of the total budget package detailed in the summer economic statement, €1.5bn has been allocated to a "tax package".