Increasing the 9 percent tourism VAT rate by 50% from March 1st next year, illustrates that the government is ignoring the sheer importance of the tourism industry to every community, town, and county in Ireland, according to the Rural Independent TDs
The group Leader Deputy Mattie Mc Grath stated:
“The government’s failure to extend the reduced 9 percent VAT rate beyond the end of February 2023, represents a major blow to all tourism and hospitality providers, especially those located in regional and rural locations. It also represents a missed opportunity to support employment recovery and growth within our tourism industry.”
“The labour-intensive Irish tourism and hospitality sector provides employment to over 270,000 people and is worth over €9.5 billion annually to our economy. Tourism is a major employer in rural areas, with 18 percent of all jobs in Kerry and 13 percent in Donegal directly dependent on the sector. Thus, the significance of this sector to the rural economy means that not extending the lower VAT rate, disproportionately impacts rural communities.”
“As one of the first sectors hit by Covid-19, and the last one to recover, it was critical that the government extended the lower VAT rate into 2024. Now, at a time when the sector is being smashed by energy cost increases, is not the time for the government to increase its tax take.”
“Rural and regional tourism providers have been doing their utmost to deliver value for money and keep people employed. Covid-19 cost Irish tourism over €12 billion during a 2-year period as international visitors, the mainstay of the industry, were prevented from coming to our shores.”
“Increasing VAT will place Irish tourism providers at a considerable disadvantage to their European counterparts, as it will make the Irish rate the second highest in the EU. It will damage the sectors competitiveness, by increasing the industry’s cost base, which will reduce demand, and risk job losses across the entire sector.”
“Budget 2023 needed to provide certainly to the Irish tourism and hospitality sector. Failure to do so will likely have profound knock-on consequences for workers in the sector and for the wider domestic economy and all,” concluded Deputy Mc Grath.
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