Hospitality Ulster chief says that 20 percent VAT of Northern Ireland is chocking tourism to death

Published on : Thursday, October 11, 2018

indexPaschal Donohoe, the Irish Minister for Finance announced yesterday what is probably being the final budget under the confidence-and-supply agreement.

Dominated by health and housing, the minister is quite certain that gross domestic product will develop in the next period against this budget.

Over the past week, most prominent to us at Hospitality Ulster and the media across the island was the confirmation by Mr Donohoe to lift up VAT on hospitality services in the Republic from earlier special rate of 9% to a new rate of 13.5%.

This encouragement has been discarded by the main lobby groups in the south, explaining that this budget is one that the tourism sector has paid for.

We know how hard they have been fighting.

Particularly, this has pulled into sharp focus the urgency for Northern Ireland to address the very high rate of VAT at 20%.

Even at 13.5% in the Republic, the gap of 6.5% places us at a grave competitive disadvantage.

The 20% tourism VAT rate of UK is one of the highest in Europe, and our hospitality and tourism are predominantly vulnerable as the Republic is its second largest market and nearest competitor.

The disadvantage of the new 6.5% gap will carry on impacting right across Northern Ireland with our VAT rate acting as a brake on the growth of the hospitality and tourism sector.

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