Belfast Telegraph

Treasury consultation over Northern Ireland tourism taxes welcomed

By Margaret Canning

Northern Ireland tourism and hospitality groups have welcomed a "call for evidence" by the Treasury into the potential advantages of cutting VAT and abolishing air passenger duty (APD).

The department said it would look into potential policy changes which could boost the tourism sector as Chancellor Philip Hammond delivered his first spring statement in the House of Commons.

The tourism industry here has fought for a lower rate of VAT, citing the Republic's 9% rate as unfair competition for Northern Ireland.

And airlines and airports have also campaigned for the abolition of APD, which is levied on flights. A similar duty was abolished over the border in 2014.

Announcing the call for evidence, the Treasury said it wanted to hear from organisations in the hospitality sector, accommodation sector, visitor attractions and business visitors and events providers.

Colin Neill, chief executive of pub and restaurant industry lobby group Hospitality Ulster, said: "This is a welcome announcement from Treasury and it is the first time that they have carried out such research into the impact of a cut in both air passenger duty and tourism Vat for Northern Ireland.

"Hospitality Ulster has led on the campaign for a cut in both of these key taxes.

"We currently have a 20% tourism Vat rate, which puts us at a distinct disadvantage to our nearest competitor and market, the Republic of Ireland, which has a 9% tourism Vat rate.

"Despite that unfair disadvantage, which could be rectified in the morning, the Northern Ireland hospitality sector continued to grow in 2017.

"The industry currently contributes £1.1bn to the NI economy annually and supports 60,000 jobs.

"Imagine how much more we could grow if the tourism VAT rate was cut to meet or beat the Republic's rate."

The Chancellor announced revisions to economic growth expectations, saying growth for 2017 had been revised up from 1.5% to 1.7% - which would be the highest rate of expansion over the next six years.

The Office for Budget Responsibility also increased the 2018 forecast from 1.4% to 1.5%.

The forecast for 2019 and 2020 was unchanged at 1.3%.

But Ulster University senior economist Dr Esmond Birnie said the Chancellor had been silent on "big, long-term issues" like funding health and social care for the elderly.

Belfast Telegraph

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