VAT hike hits pubs, hotels & eating out

Tax will jump to 13.5% after cost to State coffers

- PAT FLANAGAN

THE VAT rate for hospitality and tourism will increase from 9% to 13.5% at the end of August – which could up the cost of eating out and booking a hotel room. 

The Department of Finance has confirmed there will be no further extension of the measure which has already cost the State €300million.

The move comes after some operators in the hospitality and tourism sector had been accused of price gouging and failing to pass on VAT savings to their customers.

The Restaurants’ Association of Ireland had appealed to TDs to decouple food and drink outlets from other parts of the tourism economy and keep the lower rate for some.

But it has now been confirmed that Finance Minister Michael McGrath will not renew the extension and will allow the rate to revert to the higher level in September.