Hospitality businesses in Co Kerry have appealed to Minister for Finance Michael McGrath to row back on his plans to increase the VAT rate for the tourism and hospitality sectors from 9% to 13.5% from the end of next month.
In February, Mr McGrath extended the lower rate for a further six months.
But speaking to RTÉ News, he pointed out that that extension alone had cost €300 million and the economic case for it no longer existed.
Mr McGrath said: "This was always intended to be a temporary measure. The Oireachtas has legislated for that VAT reduction to be reversed at the end of August.
"It was always intended to be a short-term and temporary measure, so that change will proceed."
The VAT rate for tourism and hospitality, as well as some ancillary activities and hairdressing, will revert to 13.5% on 1 September.
The Irish Tourism Industry Confederation has appealed for the VAT rate to be maintained at 9%, insisting that the majority of the country's 20,000 tourism and hospitality businesses would have no choice but to pass on any increase to customers.
Those appeals have been echoed in Killarney, where the tourism industry is bouncing back from the twin shocks of Covid-19 and the Russian invasion of Ukraine.
Many in Killarney say there is still a gap between current visitor numbers and revenues, and what they were pre-pandemic in 2019.
In the town, the impact was felt even more acutely, because of the reliance of the town and surrounding areas on visitors and on the tourist spend.
An economic study for Kerry County Council found that the total number of jobs supported by the tourism industry in Killarney before the pandemic was in excess of 3,000, based on 1.1 million visitors per year.
Niamh Sheahan's family run hospitality and retail businesses in Killarney employing more than 500 people.
Covid and the invasion of Ukraine hit the Sheahan family businesses hard but they are bouncing back, she says.
"2022 was a strong year; it was the comeback year," Niamh Sheahan told RTÉ News.
"People's lives were on hold. Those who are now celebrating weddings and communions, christenings and special occasions -- we are seeing a lot of that filtering through."
Ms Sheahan joined appeals for the VAT rate for the tourism and hospitality sectors to be maintained at its current 9% so that the industry's recovery can be maintained.
She said: "The challenges, I suppose, are coming from rising costs in terms of inflation, energy costs and rising food costs.
"We would strongly appeal that the VAT rate would remain at nine per cent that it's currently at. We feel that, if that was to increase, it could send some businesses over the edge.
"It's harder than ever to protect margins. We are working harder than ever with our suppliers, with our teams, and that [the VAT increase] will have a huge impact on margins and on businesses that are already struggling to maintain margins."
Laura Tangney can trace her family's roots in Killarney back hundreds of years.
For decades, tourists have enjoyed the town's beauty spots in jaunting cars operated by the Tangney family.
As the business is classified as part of the transport sector, it is not subject to the same nine per cent VAT rate, but she said she shares the struggles being experienced by those involved in tourism.
Ms Tangney said her family is having to work harder to get the business back to where it was in 2019.
"For us, in our part of the industry, we are not at those figures," she told RTÉ News.
"I just feel we haven't got to our peak yet. We are in July. I just feel there should be more of a buzz; there should be more footfall in Killarney."
Johnny McGuire and his brother Paddy have run the Bricín restaurant and craft shop in Killarney for over 30 years.
He can feel the recovery coming, but he is anxious about the future too and feels Killarney's future lies in the environment that surrounds it -- in the 10,000 hectares of Killarney National Park.
Johnny McGuire said: "The national park is the driver of the economic life of our town.
"We are delighted with the support that has been given to the National Parks and Wildlife Service and we urge the Government to continue to re-invest in all the national parks throughout the country, but particularly in Killarney National Park, which will be celebrating its 100th year in the next few years."
