Vat rate for hospitality should be hiked, not cut to 9pc, says OECD

The OECD suggests an overhaul of the personal tax structure in Ireland, advocating for a hike in the reduced VAT rates for hospitality and tourism from 9% and 13.5%. It highlights the narrow tax base causing higher marginal rates, which discourage work. The report indicates that increasing VAT rates on certain sectors could generate significant revenue, while also calling for targeted financial support for low-income households affected by these changes. The aim is to create a fairer tax system that addresses inequities and inefficiencies.

"Increasing the reduced rates of 9pc and 13.5pc by one percentage point could yield additional revenues of €64m and €519m per year."

"Our top 20pc of taxpayers account for about 80pc of the yield, but around one-third of income earners do not pay personal income taxes or the Universal Social Charge."

Read at Irish Independent