17 Feb Temporary reduction in standard VAT rate due to expire on 28th February & unlikely to be extended
The Minister for Finance, Pascal Donohoe TD, indicated that the temporary reduction in the standard rate of VAT, which is due to expire on 28 February, is unlikely to be extended. He also noted the impact of public health restrictions on the Stay and Spend Scheme when speaking to Pat Kenny on NewsTalk last week.
The Minister detailed that the temporary reduction in the standard rate of VAT, which came into effect on 1 September 2020, cost the Exchequer €440 million. He discussed how the Covid Restrictions Support Scheme (CRSS) was a more effective measure in supporting closed retailers.
When discussing the impact of public health restrictions on the Stay and Spend Scheme, the Minister highlighted the other supports available to the hospitality sector. The Minister emphasised that the hospitality sector would continue to benefit from the 9 percent VAT rate until 31 December 2021.
The latest Preliminary Statistics on COVID-19 Support Schemes show that the accommodation and food services sector continues to make up the largest sector claimants for support under the Employment Wage Subsidy Scheme (EWSS).