The Minister of Finance is firmly maintaining his decision to reduce the VAT rate on hotels to 13.5% next year.
It currently stands at 9% and will continue until February 28, 2023.
Minister Paschal Donohoe said the government recognizes the vital role newspapers play in society, “from reporting on local communities to holding those in power accountable”.
He announced the reduction of VAT on newspapers from 9% to zero from January 1, 2023.
“This is in line with the government’s commitment to supporting an independent press and the Commission’s recommendation on the future of the media on this.”
The chief executive of the Restaurants Association of Ireland said there was “great disappointment” at the decision not to extend the 9% VAT rate for the hospitality industry.
Adrian Cummins said there was “no price rise” in the restaurant sector and that a VAT increase in February would put further pressure on businesses and consumers.
He said the industry would continue to lobby the government over the coming months.
Meanwhile, the Approved Winegrowers Association (LVA) has said it is disappointed with the government’s decision not to extend the 9% VAT rate for the hospitality sector beyond next February.
“The current VAT measures continue until the end of February 2023, so we look forward to further dialogue with the government and hope that they will extend this rate beyond the current period,” said Donall O’ Keeffe, general manager of the LVA.
Denyse Campbell, chair of the Irish Hotel Federation, said while elements of the budget will help hoteliers, the sector believes the government has missed an opportunity to continue supporting the jobs recovery and tourism growth.
“This increase will make Ireland’s VAT rate on tourism the second highest in the European Union, and well above other European countries where tourism is a significant part of their economies, such as Portugal, Turkey and Malta.
“Hoteliers and the tourism industry believe that 9% is the right VAT rate for long-term sustainable growth,” she added.
The Minister also announced the abolition of VAT on life-saving defibrillators from January 1.
A zero VAT rate will be applied to hormone replacement therapy and nicotine replacement therapy, as well as the small number of menstrual products which are currently subject to a rate of 9 cents.
Minister Donohoe said the government is committed to supporting the nighttime economy and announced that the cost of applying for a Special Exemption Order for nighttime venues has been halved in the budget from from €110 to €55.
The minister is granting up to 50 cents excise duty relief to small independent producers of cider and pear cider, also known as “perry”.