The Taoiseach has ruled out a temporary suspension of VAT for the hospitality sector.

It comes after the Minister of State for Tourism, Brendan Griffin called for the VAT rate for restaurants, bars and hotels to be set at 0% as they recover from the COVID-19 crisis.

Speaking in the Dáil this afternoon, Leo Varadkar said the plan would go against EU rules.

He said the next Government may consider a VAT reduction to help struggling hopistality businesses.

“Reducing VAT on the tourism and hospitality sector to 0% would be contrary to the EU VAT directive, so that is not possible for as long as we are a member of the European Union,” he said.

“It would be possible for the next Government to reduce it should it choose to do so, but that will be a matter for the next Government.”

A colourful painting decorates the closed shutters of a Dublin restaurant, 27-04-2020. Image: Leah Farrell/RollingNews

He agreed that the tourism industry will need a ‘recovery task force’ to help it get back on its feet as the pandemic recedes.

He credited the previous taskforce, established in 2011, with putting Ireland on a path towards “record levels of tourism” and insisted: “I believe that is possible again.”

The Restaurants Association of Ireland has called for a 0% Vat to be set for the duration of the pandemic and to remain in place for 12 months after.

Deputy Griffin also called for a once-off additional bank holiday towards the end of the year I order to support the sector.

He said the introduction of a dedicated Transport Minister “would be very beneficial” for the sector.