The cost of eating out will likely increase from September as the 9 per cent VAT rate for the hospitality sector looks set to be scrapped by the government.

Its now increasingly likely the rate will rise to 13.5 per cent on September the first.

The VAT rate was initially reduced to 9% as a measure to protect businesses during the height of the covid-19 pandemic.

The rate was previously due to expire in February, but the Government extended it for six months as part of a cost-of-living package.

The rate was initially raised from 9% to 13.5% as part of Budget 2019.

The chief executive of the Restaurants Association of Ireland Adrian Cummins, said its likely that some restaurants would have no choice but to close.

He added he expects restaurants in urban areas to pass on the extra cost to consumers.

The Association claimed If the VAT rate were to be increased to 13.5%, it would mean that we would have the second-highest rate in the European Union.