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9% VAT rate for tourism & hospitality sector must be retained

 

Following on from the revelation yesterday that the Department of Finance has advised Minister Paschal Donoghue TD that the special 9% VAT rate for the tourism and hospitality sector should be phased out, Waterford Chamber President Paul Nolan said: “The reduction in the VAT rate has helped improve the competitiveness of this sector for overseas tourism to the island of Ireland, including 4.9 million British visitors, worth €1.5 billion, in 2016 as a result.

 

“Brexit, however, is likely to have a significant impact on tourism through currency volatility and potential reduction in visitor numbers from the UK. Research suggests that outbound travel from the UK will decline by 2.5% in 2017 which will have a significant impact on Ireland. As such, Waterford Chamber takes the view that an increase to the VAT rate of 9% at this uncertain time would be detrimental to the sector.”

 

The abolition of the 9% VAT rate would raise €500 million according to the Department of Finance. However, Chambers Ireland, through their Pre-Budget Submission has advised Government to retain the 9% VAT rate as an important support to help combat Brexit challenges and as a support for regional and rural employment in the tourism and hospitality industry.

 

 

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