The Minister for Enterprise has said he will not predict whether or not the Government will opt to retain the 9% VAT rate on tourism and hospitality services or not.
Simon Coveney said the decision has to be made collectively by Government and discussions around it have begun.
"But, certainly, we'll take all of the relevant factors into account," the Minister said.
"This is a really important part of the Irish economy. We know that. There have been a lot of pressures on this sector over the last 12 months, as there has been in all businesses," he said.
"But we've also got to look at what this costs the State. And of course what that money could do in terms of business supports, potentially across other areas," he added.
Mr Coveney added that decisions would be made in the next few weeks that would be about supporting the tourism and hospitality sector as the new season starts.
"There are a lot of challenges, we know that," he said.
"In terms of accommodation availability as well as energy costs and other business pressures and the Government will make, as we always do, decisions that are that are good for business and that can ensure that this predominantly indigenous sector gets the supports that it needs for 2023," he stated.
It comes as a survey of Dublin publicans found 92% think an increase in the VAT rate will have a negative impact on their business.
The Licensed Vintners Association (LVA), which carried out the survey, said the hike in the rate would impose additional inflation on hospitality at a time when there are widespread costs accumulating across the sector and called for the 9% rate to be extended through this year.
Six out of every 10 Dublin pubs also said their energy bills have approximately doubled or more since this time last year, while just under half of all publicans said their average wage costs have risen by 20%.
"This spike in the level of taxation will certainly have an immediate impact on the cost of eating out," said Donall O'Keeffe, chief executive of the LVA.
"When you consider that pubs account for the joint second highest portion of the Irish foodservice market this seems like a damaging inflationary measure from the Government."
"We certainly believe that the VAT rate should be maintained at 9% for 2023."
Yesterday, the minister responsible for tourism has said she will seek a further extension of the 9% VAT rate for the tourism and hospitality sector in Ireland.
The current reduced rate is due to expire on 28 February and revert to the higher rate of 13.5% from 1 March.
"I've always said that should remain under review, and we take stock of where the industry is, and that is something Government will look at, will assess. No decision has been made on that yet", Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media Catherine Martin said.
The minister said it was "no secret" she sought the retention of the 9% rate in the 2023 Budget and "will continue to seek it".
