Government must retain reduced tourism VAT rate

Rate subject to review by end of February
Current 9% reduction should stay in place

Fianna Fáil Spokesperson on Tourism Cathal Crowe is calling on government to bring certainty to the tourism sector by retaining the lower VAT rate that the industry is subject to.

Following Budget 2023, it was announced that the reduced rate of 9% would be extended until the end of February, at which stage it would be reviewed.

“I am calling on the government to bring certainty to the VAT rate applicable for the tourism and hospitality sector,” said Deputy Crowe.

“At the moment, it’s subject to a reduced rate of 9% introduced in 2021 as a way of stimulating activity in these sectors and giving businesspeople in tourism and hospitality some much-needed financial breathing space.

“On Budget Day, it was announced that this VAT rate would be reviewed at the end of February and many people who work in this sector saw this as an early warning that the rate would climb back up to the normal 13.5%.

“Now that we have finally reached 2023, many commentators are predicting a slump for tourism and hospitality this year and these sectors very much remain in recovery mode following the Covid pandemic.

“In order to allow them to rebuild, we need to ensure that the VAT rate is kept as low as possible and it is my sincere hope that it remains at 9%.

“The input costs for those in tourism and hospitality have also risen exponentially in recent months and colossal utility bills have already put some out of business.

“Many of the rising costs are being passed onto the consumer and I fear that if we tinker around with the VAT rate next month, it could have the unintended consequence of making commodities in these sectors more expensive and thereby discourage consumers from spending.

“January is typically a month where families begin to plan their summer holidays and for this reason, among others, I think it’s important to nail down VAT rates and pricing for the months ahead.

“January is also a slim trading month for many bars and restaurants after a busy Christmas season.

“They too want some certainty sooner rather than waiting until the end of February.

“Tourism and hospitality are vital to the Irish economy and as a representative for Co. Clare I know all too well the positive impact it’s had for us here locally – with more than 12,500 people employed in the sector.

“It’s vital that we act now to protect it.”

-ENDS-