"The proposed Vat rate cut to support the hospitality sector will cost the equivalent, every year, of increasing the standard rate income tax bands by €3,000, hiring 11,400 nurses or recruiting an extra 7,800 teachers, the Irish Fiscal Advisory Council (Ifac) has said."
"While the Fiscal Council, headed by economist Seamus Coffey of University College Cork, does not comment directly on individual budget measures, the timing and language of the report will inevitably be seen as a blunt warning to Finance Minister Paschal Donohoe."
The Irish Fiscal Advisory Council calculates that a VAT rate cut aimed at supporting the hospitality sector would carry substantial recurring fiscal costs. The council quantifies the annual cost as equivalent to increasing the standard-rate income tax bands by €3,000, hiring 11,400 nurses, or recruiting an additional 7,800 teachers. The Fiscal Council is chaired by economist Seamus Coffey of University College Cork and typically refrains from commenting on specific budget measures. The timing and tone of the council's assessment amount to a clear fiscal warning directed at Finance Minister Paschal Donohoe about trade-offs and constrained fiscal space.
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