The Government is considering whether it should delay introducing a VAT reduction for the hospitality sector until the middle of next year.
It is understood the aim would be to create the fiscal space for more tax cuts in next October’s budget.
The Coalition’s programme for government contains a commitment to reduce VAT on the hospitality sector, from 13.5% to 9%, at a cost of around €1bn.
Minister for Finance Paschal Donohoe said last Tuesday that the measure would account for two-thirds of the allocation of identified tax cuts this year.
It is now being assessed if the measure could be delayed until 1 July 2026, a move first reported by the Irish Times.
Ministers are also said to be assessing if it is possible that the lower VAT rate of 9% would be extended only to hospitality and not to the accommodation sector.
However, nothing has been agreed on either measure so far.
