The Government's guaranteeing the cut in the lower rate of VAT to the end of next year.
It was reduced to 9% last year for certain tourism and leisure businesses as part of the jobs initiative.
The VAT rate applies to a range of services in the tourism sector, including hotels, restaurants, leisure centres, and attractions.
The temporary initiative is designed to support and protect jobs in the sector, and to help tourism and leisure businesses to lower their cost base and attract more customers.
But restaurants, hotels and other businesses had been expressing concern the cut would end this year.
Donegal North East Deputy, Joe McHugh welcomed the announcement in the Dail a short while ago.....