Varadkar pushed 9% VAT rate for hospitality sector

Details of lobbying within Cabinet ahead of the retention of the reduced 9 per cent VAT rate of the hospitality sector have emerged with the release, under the Freedom of Information Act, of a letter from Minister for Transport, Tourism and Sport Leo Varadkar to Minister for Finance Michael Noonan.

The Minister for Finance retained the 9 per cent rate in spite of giving strong indications in the run-up to the budget that it would increase.

Mr Varadkar asked Fáilte Ireland to commission a report on the impact of the lower rate with the report carried out by Deloitte.

In his letter dated July 31st, Mr Varadkar stated that, in light of the report, “I believe that not only are there very strong economic grounds of maintaining the 9 per cent rate, but that it is affordable from an exchequer perspective”.

He said it had been one of the most successful job-creation measures implemented by Government to date.

“It has helped to drive an increase in overseas tourist numbers and revenue due to an improved perception for value for money in Ireland which has in turn helped to create between 10,000 and 25,000 new jobs depending on which study you provide.