The reduced VAT rate for the hospitality industry could have cost the State more than €500 million since its introduction four years ago.
Hotels, restaurants, caterers, hairdressers, newspapers and other businesses in the hospitality sector have benefited from the reduced 9% VAT rate since 2011.
Industry lobbyists say the rate has led to lower prices which encourage sales and employment.
However, CSO figures show the prices charged to consumers in many of these industries have actually risen over the past 12 months.
Revenue figures released to RTÉ's Morning Ireland show if VAT returns were paid at the full 13.5%, there would have been an additional €644m paid to the State.
It is not possible to tell how much of those returns only exist because the rate was reduced.
Minister for Finance Michael Noonan warned the industry in his Budget 2015 speech that the reduced rate would be reconsidered if prices began to rise.
However, the Consumer Price Index shows the cost of hotel accommodation rose by 5.2% between January 2014 and January 2015.
During the same period hotel sector VAT returns totalled €135.6m.
If those sales were charged at the higher rate, the return to the exchequer would have been an additional €69m.
A similar pattern has emerged in the restaurant sector with prices rising by almost 2% in the last 12 months.
During the equivalent period Revenue potentially lost out on €72m in VAT payments from restaurants.
In a statement, the Department of Finance said: "Since the introduction of the reduced VAT rate in the Jobs Initiative employment numbers in the accommodation and food services sector have increased by 24,000 on a seasonally adjusted basis.
"This means the sector is responsible for more than one-in-three extra jobs created in Ireland since the middle of 2011."
Defending the reduced rate, the Irish Hotels Federation warned that the long-term future of the industry could be affected if the rate is returned to 13.5%.
It said tourist numbers have increased from 5.9 million in 2011 to 7.3 million in 2014 and significant employment has been generated as a result of the measure.
IHF President Stephen McNally said: "The Government has to think if they turn off the tap are they at risk of chasing tourists away from the country?"
"If you talk to anyone in the industry they will tell you it has worked for them. If the rate is not maintained big questions will be asked about what will happen," he added.
However, SIPTU has accused the industry of "pocketing" the reduced VAT rate.
The trade union is calling on employers in the industry to enter talks on a new joint labour committee (JLC) for workers or lose the reduced rate.
A JLC would set pay rates and conditions for hospitality sector staff.
Divisional Organiser John King said the VAT rate was introduced as means to reduce prices in the sector.
But he said: "Insofar as we can establish, the rate was not passed on to the consumer; employees saw no benefit from it, so it is our assessment that the reduction was pocketed by the hospitality sector."
He added that as long as hotel and restaurant owners refuse to engage with the JLC system "the VAT rate should be taken off them."
The Restaurants Association of Ireland described the union position as "nonsense".
"It is a vested interest appeal for their own members. Taking the reduced rate off the tourism industry is a step in the wrong direction. We will go back to laying people off," said CEO Adrian Cummins.
In a statement, Revenue said: "Everything else equal, a lower rate means lower receipts. However, lower rates should also mean lower prices and more demand, which pushes up receipts.
"Overall receipts have increased in these sectors so the latter driver is presumably outweighing the former.
"To properly estimate an Exchequer cost, you would need to know by how much this improved performance outweighs the lost revenue from the lower rate. Again, we don't have a basis for estimating this."
