Maintaining low VAT rate will boost local tourism – Paddy McCarten

Fine Gael Councillor Paddy McCartan has welcomed the Government’s decision to maintain the 9% VAT rate for services in the tourism and hospitality sector, saying this will continue to boost trade in this industry.

“I am very pleased that the lower VAT rate on tourism services of 9% is being maintained,”  Paddy McCartan  stated. “The VAT rate was previously 13.5% and the Government took the decision to reduce it by a third, in a bid to kick-start the tourism and hospitality sector, which had suffered over the past number of years. This lower rate has proven to work, as we’ve see steady increases in the number of tourists visiting Ireland over the past couple of years.

This reduction has also had a significant impact on job creation in the hospitality industry. The decision to retain this lower VAT rate will benefit consumers, business owners and jobseekers in Dublin. The reduction of VAT on food and accommodation services was specifically designed to generate jobs and it has been hugely successful.

“Figures released by the Central Statistics Office show that employment in food and accommodation services is up by more than 23,000 since the Government reduced the rate of VAT for tourism services. Over 8,000 of the 31,600 jobs created nationally in the last twelve months were in the hospitality sector. This has a trickledown effect in every town and village in the county, including our own.

“The reduced lower rate of VAT is worth €2,250 for every €50,000 turnover within the tourism sector, and that is a significant boost in an industry which operates with tight margins. This enables hospitality focused businesses in Dublin to keep their prices low and, in doing so, attract more business which requires them to take on more staff.

“It’s very important that our businesses are supported. Many of our local businesses are to be commended for staying afloat during one of Ireland’s toughest economic times. Now is the time for them to begin to flourish again and maintaining this low VAT rate will ensure that our local pubs, restaurants and hotels are supported in securing their future, continuing to grow and creating further employment,” the Fine Gael Councillor concluded.