Belfast Telegraph

Republic's reduced tourism VAT 'crucial for sector'

By Staff Reporter

The Republic's much-coveted 9% VAT rate is essential if the tourism sector is to remain competitive, the new president of the Irish Hotels' Federation (IHF) has said.

Hotels and other tourism businesses over the border have been able to charge VAT at 9% since 2009, instead of its main rate of 23%.

And hoteliers in Northern Ireland have said the rate cut should be mirrored here - from the UK rate of 20% - to bring a level playing field.

But the Treasury has said cutting VAT would be costly, with other forms of revenue having to plug the gap.

IHF chief Joe Dolan told an event in the Republic yesterday that he believed the tax concession should remain.

He said the reduction in VAT was the "single biggest job creation strategy since the foundation of the state".

"Our competitiveness, of which VAT is a significant part, is the difference between some hotels staying open that otherwise would have closed, and raising it would be hugely counter-productive," Mr Dolan added.

"It's just on a par with our counterparts in Europe and if we can retain our VAT, we can retain our momentum and sustainable growth.

"Outside of the Dublin, the reduced rate of VAT has actually kept some properties open and people in jobs."

Mr Dolan, who owns the Bush Hotel in Carrick-on-Shannon, Co Leitrim, is widely seen as a champion for small, family-owned hotels.

In 2014, he dramatically halted the auction of the farm of a neighbour at his hotel, which was being sold against the farmer's wishes.

At its annual conference in the Gleneagle Hotel in Killarney, the IHF also called for a capital budget of €300m (£233m) for tourism-specific projects over the next five years.

"If we want a solid, sustainable tourism we have to invest directly ourselves," Mr Dolan said. "When you invest in marketing tourism there is a return for every euro spent of €34 (£26) to the Irish economy and into creating jobs.

"An unprecedented 33,000 jobs were created during the past five years. And in the next five years, creating the same growth alone, we can be confident in creating 40,000 more."

And rejecting criticisms that these jobs were traditionally low-paid," he added: "Hospitality is a low-paid sector but low pay is better than no pay, employment is better than no employment, and emigration is a lot less attractive than being at home."

Belfast Telegraph