Minister for Finance Michael Noonan has indicated that the 9% rate of VAT for the hotel and tourism industry will rise in the forthcoming Budget.
It was reduced from 13.5% in 2011.
Speaking in Limerick this afternoon, Mr Noonan said the reduction was brought in as a temporary measure and both the Department of Finance and Revenue had built its restoration into their Budget figures.
He said he is aware of considerable lobbying from both those in the restaurant sector and from councillors across his own party calling for the 9% rate to remain.
He said that if it was retained he would have to find €360m elsewhere.