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Minister backing 9pc tourism VAT

TOURISM Minister Leo Varadkar (right) is to argue for a continuation of the reduced 9pc VAT rate for the tourism sector in the next Budget.

The lower rate costs the Exchequer about €350m a year in lost revenue, but is credited with increasing visitor numbers to Ireland.

Mr Varadkar has told hoteliers they will need to present clear evidence the reduced rate is having a strong positive impact on the sector.

Finance Minister Michael Noonan introduced the measure in July 2011.

However, the rate is due to return to 13.5pc on January 1 next year.