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Tourism ministers plead for cut in VAT to entice visitors

Published 01/03/2016

Tourist ministers have called for a cut in VAT
Tourist ministers have called for a cut in VAT

The UK's devolved governments have repeated pleas for the Treasury to cut VAT to boost the tourism industry.

Tourism ministers held a meeting in London on Tuesday and called for the impact of a VAT cut to be researched.

The Scottish Government said 25 EU countries have recently reduced VAT and believe a cut would allow tourism businesses to better compete with European countries.

Powers over VAT are reserved to the UK Government.

Tourism Minister Fergus Ewing said: "Of 28 European Union countries, 25 have reduced tourism VAT, with only Denmark and Slovenia having higher VAT rates than the UK - where the rate is currently 20%.

"Today, we discussed the particular case of the Republic of Ireland, which temporarily reduced VAT on tourism from 13.5% to 9% in May 2011, but has kept the cut in place because of the benefits its tourism industry has enjoyed as a result.

"We believe that reduced VAT for tourism businesses may have brought important benefits for some states, but more needs to be done to collate hard evidence on the subject.

"That is why the UK, Scottish, Welsh and Northern Irish tourism ministers have agreed to ask the Treasury to undertake a study on a reduction in VAT and its potential to support the tourism industry.

"With the vast majority of European countries administering lower VAT rates for tourism businesses, and reportedly seeing considerable benefits, the need to look again at this important issue is compelling."

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