The VAT rise on the hospitality sector could go ahead, Minister for Enterprise Simon Coveney has hinted. 

During the pandemic, the rate was cut from 13.5% to 9% in order to boost an industry that was suffering hugely from the end of international tourism. 

In last year’s Budget, Minister Paschal Donohoe announced the cut would expire at the end of February and today Minister Coveney hinted the rise would go ahead as planned. 

“This was a temporary and targeted support,” he told The Hard Shoulder. 

“That may happen; I mean, the Government hasn’t finally decided on this yet. 

“My Department will be inputting this; I have quite strong views on this.” 

The hospitality sector has lobbied for the rise to be delayed or cancelled but Mr Coveney refused to be drawn on his own personal views and said they would be expressed “only around the Cabinet table”. 

A hotel room

“We’re meeting again tomorrow to [discuss] how we can support businesses as a whole and of course what we can afford to do,” he said. 

“My role is to try to get the right decision here and to work with colleagues in Government to try and get that rather”. 

Notes that extending the VAT rate would cost 0.5 billion a year. 

“If we were to simply extend the lower VAT rate for another year, that would cost us half a billion euros.

“The Government has to measure, is that the best way to spend money to support businesses?

“We need to weigh it up against the other supports that we can give them but we haven’t finalised a decision.”

Main image:  Simon Coveney. Credit: Sipa USA/Alamy Live News