The Public Expenditure Minister says the government will be 'fair' when deciding whether or not to raise the VAT rate for hospitality.

The reduced rate of 9 per cent - to help combat rising inflation - is due to return to 13 point 5 per cent at the end of the month.

However, the industry claims many businesses will buckle under any further increase in costs.

Minister Paschal Donohoe previously accused hoteliers of price gouging customers and considered raising the rate in Budget 2023.

He admits the government can't afford to extend all of the cost of living supports.