The Irish Hotels Federation says the current VAT arrangements for hotels and restaurants are a major barrier to the development of Irish tourism.
In a pre-budget submission, the IHF said Ireland's 13.5% rate for hotel accommodation charges was the second highest in the euro zone. It called for the rate to be cut to 10%.
It added that, unlike other countries, this rate was not recoverable for legitimate business expenditure.
The IHF called on the Finance Minister to allow VAT on business expenses incurred on hotel and restaurant costs as inputs for VAT registered businesses.
It also called for a 'more equitable' funding structure for local authorities and limits on increases in commercial rates.
