Tourism Minister Shane Ross is seeking to exclude some hotels from any VAT increase which may be introduced in the next Budget.
However he warned that hotels which are “milking” customers with high room charges face losing their entitlement to the special low Vat rate.
Answerinf media questions at the Tourism Ireland mid-year review, he said that a tiered system is being considered which could see bigger, more profitable hotels paying higher Vat rates if budget changes are agreed by the Government.
Under proposals being considered by the Minister for Finance, the full 13.5% rate would be restored for accommodation businesses such as hotels, bed and breakfasts, and guesthouses. The lower rate of 9% could remain for others such as restaurants, cafes, hairdressers, newspapers, and entertainment services.