The Government is set to agree an extension of the 9% VAT rate for the hospitality sector when the Cabinet meets tomorrow morning.

Minister for Finance Paschal Donohoe is likely to bring what is termed an "under the arm" memo outlining the details of the extension.

It is thought that the 9% VAT rate, which was due to expire at the end of August, could now run for a further six months.

Discussions on the issue so far have centred on the need to continue support for the hospitality sector as the Covid supports are phased out.

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Adrian Cummins of the Restaurants Association of Ireland welcomed the proposed move on the lower VAT rate.

He said it would help settle businesses ahead of what will be a "bumpy tourist season".

However, he said the lower rate should be extended to the end of 2023 given the debt many businesses have built up.

Tourist numbers had not yet returned to pre-Covid levels, he added.