Irish tourism industry gets relief with retention of 9% VAT rate

Published on : Thursday, October 12, 2017

Irish tourism industryThe tourism industry of Ireland expressed relief after retaining its special 9 percent VAT rate, which State officials had implied that it might be scrapped in the budget of 2018. The Government also announced a 2.75 per cent increase in funding for tourism marketing for next year.

 

Trade unions had wanted the VAT rate to be increased to raise cash for public spending, while sections of the tourism industry were being criticized for implementing sharp price increases while calling for the discounted rate to be retained.

 

Minister for Finance, Paschal Donohoe said, “While I note that prices in Dublin continue to rise, I have said before that VAT policy cannot be decided on the basis of one location, only but in the context of the national interest.”

 
Donohoe said that the uncertainty for the industry created by Brexit is another reason for leaving the special rate intact.

 

Fáilte Ireland, which markets Ireland to domestic tourists and looks after the development of the industry, welcomed the retention of the 9 percent rate, but warned the industry that it would also have to implement price restraint.

 
Fáilte Ireland said, “The continuation of this measure will help sustain growth but it must also be accompanied by a renewed effort on the part of the industry to maintain competitiveness and avoid price inflation. An emphasis on greater competitiveness, allied with the lower VAT rate… will create the necessary environment to generate additional revenue and deliver more jobs.”

 

The Restaurants Association of Ireland and the Irish Hotels Federation also welcomed the rate retention.

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