Ireland likely to extend hospitality VAT cut: Deputy PM

A man walks his dog near a closed bar, as the spread of the coronavirus disease (COVID-19) continues, Dublin, Ireland

Ireland is likely to extend a VAT rate cut for the hospitality sector into 2022 as some restrictions affecting it are expected to be in place at least until year-end, Deputy Prime Minister Leo Varadkar was quoted as saying on Wednesday.

The government cut the value-added tax rate for the sector, among those hit hardest by COVID-19 disruptions, to 9% from 13.5% in November. The rate is due to run until December 2021 but the sector was shut down for a third time late last year and may not reopen until June.

“I can’t see a full recovery [for those sectors] until maybe 2023 and heavily caveated with all the uncertainties about the virus and the economy,” Varadkar, who is also Ireland’s business minister, told the Irish Times in an interview.

Varadkar said on Tuesday that Ireland is set to gradually emerge from its strict COVID-19 lockdown between April and June, with outdoor dining and domestic tourism likely to be possible during the summer.

He told the Irish Times that some form of restrictions will be in place “at least until the end of the year if not well into next year”. Gatherings of more than 50 people are unlikely to be permitted until 70 or 80% the population is vaccinated, due by September.

“There is still a worry about next winter because it does seem there’s a seasonal element to this virus,” Varadkar said.

“So there will be a concern about a fourth wave of some sort next winter and there will be huge caution about allowing mass gatherings until we get through another winter.”

He said he did not think it impossible that pubs that do not serve food – which have been fully or almost entirely closed for almost a year – could reopen during 2021.

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